Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Local Authority Debt Repayment

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Clelland.]

Mr. Graham Brady: I am grateful for this opportunity to initiate a debate on an important, if rather abstruse, issue of local government finance. Just the name of capital financing adjustment seems to lead to people's eyes glazing over and their turning quickly to another matter. However, it is important that we consider the issue. It is particularly important that the Minister should hear the views of hon. Members on this important element of capital financing for local authorities.
The issue sounds dull and complex. Sadly, little attention has been paid to it. It is fortuitous that this debate is taking place only one day after a debate on the hidden tax increases that the new Government have already introduced. For my constituents—and all the residents of the borough of Trafford—this is yet another hidden tax. The Government's changes to the calculation of the capital financing adjustment will mean a tax increase for millions of people throughout the United Kingdom.
Like many of the Government's changes, those changes have been introduced by stealth, taking funds away from Trafford and many other local authorities. Perhaps worse than that, not only have the Government taken funds from authorities that have traditionally been prudently managed, but they have transferred them to some of the most profligate and ill-managed authorities in the country.
Trafford councillors are appalled as much by the way in which the new charge has been sneaked into place as by the financial penalty that is being imposed on them. The complexity of the matter is being used to cover the Government's tracks. That tactic has also been used for the introduction of the £5 billion annual pension tax through a technical adjustment that was little understood at the time. The same approach to taxation was shown by the Government's shift to quarterly payment of corporation tax. At the time, it was portrayed as a benefit for business, but it will be a £22 billion cash flow cost for businesses during this Parliament.
During this short debate, I hope to shed a little light on the complex matter under consideration and to attempt a simple explanation of the impact of the Government's changes. The previous Government calculated the capital finance standard spending assessment on the basis of a notional 1990 debt level. That rewarded councils that had behaved thriftily and responsibly during the 1980s—councils such as Trafford, which had benefited from good

Conservative administration through the 1980s. Indeed, Trafford had benefited from Conservative administration from its inception in 1974 until the tragic events of a couple of years ago, which, I trust, will be only a brief interlude of insanity for the borough.
The Government's new system adopts a different approach, taking into account the higher of either notional or actual debt in calculating the capital finance SSA. That reallocates the given cake that is available to favour profligate authorities—very often, it hardly needs to be said, Labour authorities—at the expense of those that have been better managed. Many of the councils benefiting from the change are those that flouted public spending controls in the 1980s, often through creative accounting techniques that have since been made illegal.

Mr. Tony McNulty: Such as?

Mr. Brady: If the hon. Gentleman is patient, he will hear some examples. I know that he does not expect to be disappointed.
The history of the capital financing adjustment is like a trip through an old Labour theme park. From newspaper reports from the 1980s, I have found a series of examples, which the hon. Member for Harrow, East (Mr. McNulty) has asked for. The Times of 24 June 1987 stated:
Local ratepayers could face a 357% increase to finance creative accountancy debts: unions in Manchester fear 16,000 council workers may have to be dismissed",
and
David Blunkett admits that his authority's capital programme stands to be 'devastated'".
That was at a time when Manchester city council raised £200 million by selling civic buildings, including the central library, to a company that it wholly owned, and arranged a two-year rent holiday. Similar tactics were used in Brent and Lambeth. Some of the perpetrators of such scandalous abuses are now members of the Government; others sit on the Government Back Benches—although I do not see any present for this debate.
Labour claims to have changed, but in office, stealthy changes to the capital finance system for local authorities are often portrayed as technical changes, which people will not understand or notice. Changes are being introduced in a quiet, cautious way, with no fanfare or announcement of the impact that they will have. Such changes are rewarding old friends and punishing well-managed authorities.
My borough of Trafford will lose £700,000 from its SSA. That equates to the cost of 28 teachers, whom the borough could otherwise have employed. It amounts to the funding of two primary schools for a year. It could have been used to reduce each council tax bill by £10.

Mr. Nick Gibb: Is my hon. Friend aware that, in West Sussex, the result of fiddling with the formula is a £2 million reduction in our central Government grant, which is equivalent to a rise of 1.5 per cent. in council tax?

Mr. Brady: I am grateful to my hon. Friend for bringing that to my attention. It is by no means an isolated incident. The change in capital financing has shifted funds from prudent authorities, from authorities that have


borrowed sensibly or not at all, to authorities that indulged in very high levels of borrowing before April 1990. Such a perverse policy rewards activities, policies and management techniques in local government that any Government would say they wish to avoid. The Minister must therefore explain why his Government feel it appropriate to reward authorities that have behaved badly at the expense of those that have behaved well.
The reduction in Trafford's SSA is equivalent to the cost of 350 secondary school places, which could otherwise have been provided. That is particularly relevant in Trafford, because our excellent local schools are so popular that they should be given funds to expand, and not be deprived of the funds that they need. The loss of £700,000 combines with other factors in this year's SSA settlement to mean a real-terms cut of £3 million. That will mean higher taxes, together with lower service levels. The same pattern is being repeated across the country as local authority budgets are fixed for the coming year.

Mr. Brian White: Is the hon. Gentleman saying that, until 1 May, all local authorities were given lots of money and that the activities that he is describing have occurred only since 1 May? Many of us were in local government for a long time and experienced the previous Government's restrictions on local authority capital financing, which were far worse than anything that the hon. Gentleman is describing. He ought to be addressing the previous Government.

Mr. Brady: We would all be delighted with more resources in national and local government, in order to provide services. Such resources must be divided fairly, in an understandable way, which rewards and is seen to reward good, not bad practice.

Mr. McNulty: Will the hon. Gentleman give way?

Mr. Brady: No, I am dealing with the previous point. My contention, which the Minister must answer, is that the Government's policy on changing the way in which the capital financing adjustment is calculated effectively rewards bad practice and penalises good practice.
The overall loss to well-managed authorities will be significant. The loss of about £50 million in the shire counties compounds the sense that they are being penalised, often at the expense of cities. The example of Trafford illustrates that the change is not simply a raid on shire counties. The policy also penalises metropolitan boroughs that have been better managed.
The worst thing about the policy change is not its day-to-day effect or its effect on particular local authorities—it is the principle that the Government are setting out as a guide for local authority practice. The message of the policy is that the Government intend to reward and encourage bad management, profligacy and waste, and to punish good, thrifty councils.

Mr. Ken Purchase: Will the hon. Gentleman give way?

Mr. Brady: I am coming to a conclusion; I shall not give way.
If Labour has changed, it must review the decision and reverse the policy. I urge the Minister to address that.

Ms Sally Keeble: I am grateful for the opportunity to speak in the debate. I had not intended to do so, but, given the remarks of the hon. Member for Altrincham and Sale, West (Mr. Brady), I felt it necessary to spell out some of the thinking in Labour-controlled local authorities during the 1980s and to support the steps that the Government are taking.
The hon. Gentleman is quite right that local government financing is extremely abstruse. I and many of my colleagues wrestled with it in the 1980s and the early 1990s, so we know very well that, when spending allocations were fixed around some notional figure, strange anomalies sometimes arose. One found that spending programmes were moved between revenue and capital purely because of the availability of finance and not necessarily because that was the best way of financing or because the projects concerned were top priorities.
Underlying what the hon. Gentleman said, I detected a desire to draw distinctions between good and bad local authorities, and the implication that the good ones were Conservative and the bad ones Labour. That is the complete opposite of the truth. If Conservative authorities had been so good, more might have been left. Conservatives lost profoundly at the ballot box, which, in any democracy, is the ultimate test.

Mr. Brady: I am sure that the hon. Lady is well aware that, over the years, many factors have resulted in certain changes in local authority control. One of the principal factors in recent years was that the Conservative Government had become unpopular. There is no question about that, and we are well aware of it. Even though that happened, the borough of Trafford remained under Conservative control from 1974, when it was set up, until 1995. The Labour party has only a very tenuous grip on it, and should wisely consider some of the specific examples that I quoted.

Ms Keeble: That was a speech, not an intervention. The reason why people supported Labour-controlled local authorities in the 1980s and the 1990s when, I admit, some of us made mistakes, was that we were overwhelmingly seen to be supporting the communities that we represented. People supported us because we had that link. As leader of an inner-London authority, I had to grapple with supporting and protecting communities against the appalling scandals of Tory economic policy and the impact that it had.
During all the Tory years, male unemployment in the ward that I represented was about 35 per cent., and unemployment among women was so high that I think that it would have been virtually impossible to calculate. Local shops closed down not because of lack of trade but because people in the community did not have enough money in their pockets to be able to buy enough to keep the shops open. There was low income and unemployment. Whole communities were discarded by the Tory Government as being unworthy of, for example, job creation schemes. Disadvantages were not tackled. Such communities were deemed unworthy of programmes that could deal with disadvantages of race, sex and disability.
Labour councils had to pick up the tab for protecting the communities that Tory central Government had discarded. In Southwark, we used to call the Tory Government the "shower across the water". It was apparent what was happening. In examining our management of local finances, we had to bear certain things in mind. My council was much criticised by the shower across the water—I was going to say "you lot", but I thought that I might get into trouble.
Most local councils look to maximise spending on local services, because they are the only services that people will get. Labour councils offered the only lifeline out of poverty and unemployment. By reorganising their operations, most Labour councils sought to maximise spending on services and not on bureaucracy.

Mr. Tim Yeo: The hon. Lady is obviously concerned that Southwark should have enough money to spend on services. Does she share the concern expressed by my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) about the effects of the change to the capital financing adjustment? In Southwark, the standard spending assessment for next year will be reduced by £860,000 as a direct result of that change. Does the hon. Lady believe that that will help the voters about whom she is so concerned?

Ms Keeble: I do not represent any of the Southwark constituencies, so it is difficult to comment on the details of those figures. I am talking about the council's history and how we have arrived at our present position. In that context, I am explaining why the Government are taking the right decisions. The council sought to maximise expenditure on services, which meant that the money spent—be it revenue or capital—was geared directly to ensuring maximum service provision.

Mr. Tony Colman: Does my hon. Friend agree that all debt entered into during the 18 years of Tory central control was approved by the then Department of the Environment? Local authorities could not go it alone: their debt was always fully approved by the Tory Government of the day.

Ms Keeble: Exactly. I thank my hon. Friend for that comment, which brings me to my next point—and if the hon. Member for Altrincham and Sale, West objects, I shall certainly give way.
Southwark council was aware that, despite opposition to Conservative policies on local government finance, we had an obligation to operate within the law and to ensure that we made sound financial arrangements for local services upon which the community relied. That is why we adopted both capital and revenue spending regimes that were not always incredibly helpful: we had to live within them in order to ensure that services were not disrupted by intervention from central Government via the Department of the Environment. That is why my hon. Friend's point is so important.

Mr. Brady: I am keen to reply to that specific point. It takes no account of the case that I made regarding some of the creative accounting techniques used. A key problem in the 1980s was not the levels of debt authorised by the Department of the Environment, but the mechanisms that local authorities sometimes used to avoid those controls.

Ms Keeble: I am sure that those creative accounting techniques have no bearing on the changes that we are

discussing today. The most scandalous accounting—I shall not call it creative accounting—was practised by Westminster council. Southwark council examined the local government spending rules and worked out how we could use those rules—completely within the law and approved by the Department of the Environment, as my hon. Friend the Member for Putney (Mr. Colman) said—to maximise spending on the local services on which our community relied.
That brings me to a matter which I am sure that my hon. Friend the Minister will mention. The experience of those years left me—and probably most my colleagues—in absolutely no doubt that the rules for local government spending were abstruse and chaotic and urgently needed reform. Both the revenue and capital rules should match closely the needs of the area, so that SSA calculations are not based on the nonsense of hotel nights, and so on. Capital should reflect expenditure. It should be calculated in such a way that money allocated may be spent on capital projects, such as schools, and is not allocated to different forms of notional spending that would ultimately skew the way in which the money is spent.
I had to wrestle with those problems for eight years, and for three years as leader of Southwark council. I am extremely pleased that the Government are considering ways of changing both revenue spending and capital spending to ensure that they provide a good, sound basis for service provision. I am absolutely delighted that, through some other departmental and job creation programmes, the Government are addressing some of the employment issues that were such a problem for the council. That will automatically ease the serious pressures on council revenue spending with which I and many of my colleagues have wrestled in the past.

Mr. Laurence Robertson: I congratulate my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on the way in which he introduced the debate. He put his finger on a complicated matter which has a great effect across the country, particularly in councils such as Trafford and Tewkesbury. I thank my hon. Friend for bringing the issue to the attention of the House.
The information that I shall use in my brief contribution was provided by the Under-Secretary of State, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), a short time ago by way of a written answer. I am grateful for his assistance. When I examined the settlement in Tewkesbury, I found that the council faces a 5.1 per cent. reduction in its standard spending assessment. I found that quite odd, so I examined the situation more closely—the Minister was kind enough to provide the details—and I discovered that, if national totals had been taken into account, Tewkesbury would have received an increase of 0.8 per cent. If demographic changes in Tewkesbury had been taken into account, it would have had an increase of a further 0.6 per cent. However, the method of distribution would have meant a loss of 6.5 per cent.
Because of the changes, the net reduction in Tewkesbury is 5.1 per cent. I am told that changes in the composition of the indices in the all other services block and changes in the treatment of debt are responsible for that. That seems rather unfair. Tewkesbury does not have any debt, and that seems to have cost it dearly. My office contacted Tewkesbury's finance section yesterday, which


agreed that the settlement was unfair. The council said that it might not have paid off its debts if it had known that the new system would be introduced. I am sure that many councils will be encouraged to take on more debt, in the knowledge that the Government will bail them out. The Government seem to have created a rather odd system that will encourage debt, which must lead to a reduction in council services throughout the country.

Mr. Colman: Will the hon. Gentleman join me, as a Member of Parliament with a Tory-controlled council—Wandsworth—which has reduced its services, in condemning Tory Wandsworth for sitting on more than £30 million of balances and refusing to pass a Labour group proposal for a lower council tax of £295, when it has been affected in a similar way to the hon. Gentleman's council?

Mr. Robertson: I will certainly not join the hon. Gentleman in condemning any council. I am not making that point, and I do not have the knowledge to speak about Wandsworth, although I understand that it has held a responsible level of council tax, community charge or rates for many years.
If a council increases its debt, the voters in the area should, unfortunately, have to pay for it until the next opportunity to kick out that council. I do not see why people in Tewkesbury, which has incurred no debt, should have their grant reduced simply to pay for the sort of councils that my hon. Friend the Member for Altrincham and Sale, West discussed.

Ms Keeble: Can the hon. Gentleman relate figures for finances to the services provided? People are extremely interested in what they get for their money. In particular, could he say what his county council is doing about some of the services that are most important to local people, for example, nurseries?

Mr. Robertson: The hon. Lady may recall that I asked a question of the Secretary of State for Education and Employment about Gloucestershire county council. Mistakenly, the right hon. Gentleman assumed that it was under Conservative control and condemned it for its nursery policy. In fact, for many years, it was controlled by the Liberal Democrats, so he got that wrong. He also got another aspect wrong, as the Labour group on the council has tried to deny passported money going to schools, and it is going to the schools only because of the Conservative group on the council. Therefore, perhaps the hon. Lady ought to look a little more closely at the matter than the Secretary of State did on that occasion.
To return to the reply that the Under-Secretary was kind enough to give me, it seems that the reduction in total of revenue support grant and redistributed non-domestic rates in Tewkesbury exceeds the reduction in the SSA. The hon. Gentleman informed me that that follows changes to the SSA system and, crucially—this will come across to council tax payers in the near future—one of the causes of the change has been a shift in the cost of local authority services from central Government to council tax payers. With the new change, it seems that the cost has been shifted only to certain council tax payers—in other

words, those in prudent authorities and not those who live in the sort of authorities that my hon. Friend the Member for Altrincham and Sale, West so eloquently described.

Mr. Tim Yeo: I am grateful to you, Mr. Deputy Speaker, for calling me rather earlier than I had expected. That gives me the chance first to congratulate my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) on what everyone present would recognise as a speech impressive in its command of a complex subject, eloquent in its trenchant denunciation of the extraordinary change that the Government have made in the capital financing adjustment this year and powerful in its conclusions, to which I will return.
The debate is important because we are just beginning to see the consequences of the changes to the capital financing adjustment and timely because those changes will become apparent to council tax payers throughout the country in the next few weeks as demands hit mats. Although change in the capital financing adjustment is a complex issue, the consequences of that change are fairly simple and I shall concentrate on them. The effects of that change, and a number of other changes in the way in which SSAs are calculated, are beginning to be revealed in a series of record increases in council tax. In the next five or six weeks, council tax increases in a large number of authorities will be higher than any increase since the system was introduced.

Mr. White: In the 1996 Conservative Government's Budget, it was stated that council taxes for last year and this would be raised far higher than inflation, to shift the balance back to local tax payers. That was the your Government's policy, but you seem to have forgotten that.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I must remind the hon. Member that I was not a part of any Government.

Mr. Yeo: I am glad that the hon. Member for Milton Keynes, North-East (Mr. White) raised that point, as I intend to come directly to it. The Secretary of State for the Environment, Transport and the Regions has confirmed that, had the Conservative party remained in power, the average rise in council tax would have been significantly less than the rise that results directly from the Labour Government's decisions. We have him on record in the House saying so, and I shall quote the relevant section of Hansard in a moment. This year will be notable for record increases in council tax and, unfortunately, for reasons that I shall explain, it may not be the last year in which we have such increases.
I was surprised by the speech of the hon. Member for Northampton, North (Ms Keeble), who spoke of her experience in Southwark. Given the record of that borough, frankly, I would rather have kept quiet in the House about my involvement.

Ms Keeble: As I said, all of us have made mistakes. However, is the hon. Gentleman aware that Southwark was the only council that froze the poll tax for the whole three years that it was in existence?

Mr. Yeo: I am afraid that we are not debating the poll tax and it was not even directly the cause of the


Conservative defeat at the election last year, since it was abolished before the previous election, which the Conservative party won. It is difficult to see how one can relate that tax to the change in the capital financing adjustment, which is the subject under debate. The hon. Lady referred to Southwark at some length and, given the borough's record, I should have thought it wiser to keep quiet about any connection with it, had I had any such connection—I am glad to say that I do not.
If the hon. Lady had troubled to inquire about the subject that we are debating, she would have found that Southwark has lost £862,000 of SSA directly as a result of the change. Like many other inner London boroughs, it has suffered badly in the SSA calculations this year because the Government and the Labour party are so consumed with envy at the outstanding success of Westminster and Wandsworth they have deliberately fiddled the formula to attack Westminster and, unfortunately, have swept up a lot of other inner London boroughs as well. I hope that, after they have seen enormous rises in council tax in London, that point will not be lost on voters in inner London on 7 May.

Mr. Adrian Sanders: It is not merely the London borough of Westminster that has lost out in the settlement. One of the other changes in the formula has been the adjustment to the bed nights, which has cost many coastal resort local authorities and areas that receive visitors a great deal in their SSA this year—something which the Minister, in a recent debate, agreed to reconsider for next year. I hope that the hon. Gentleman will re-emphasise that. The restoration of the special recognition of the extra costs of being a tourist area, such as providing more public conveniences, car parks and leisure facilities, would be welcome. The loss of that recognition has also cost council tax payers dear.

Mr. Yeo: The hon. Gentleman is right to draw attention to that matter. I confess to having some sneaking sympathy for the Minister. Dividing up the cake among the local authorities is a problem for any Government. They will never produce a formula that will satisfy every local authority or even every group of authorities, because they have directly competing interests in this matter. Whatever the size of the overall cake, some will be disappointed.
As my hon. Friend the Member for Altrincham and Sale, West rightly pointed out, the problem about those changes is that they seem to have been motivated by a desire to penalise authorities that have been acting responsibly. Southwark has lost out, and I hope that the former voters in Southwark of the hon. Member for Northampton, North will be aware of that. Northamptonshire county council has also lost badly as a result of the change, and I am sure that her voters will be interested in the enthusiasm with which she supported the Government's decision to make the change when it has clearly penalised them so directly.
The consequence of the changes is a huge rise in council tax. Throughout the country, council tax payers and service users are starting to learn exactly what it means to have a Labour Government at Westminster. It is clear, even before next week's Budget, that Britain cannot afford a Labour Government.
The capital finance adjustment and the other changes to the calculation of SSAs will result in an increase in council tax in Devonshire of 19 per cent.,

in Northumberland of just under 18 per cent., in Cheshire of 17 per cent. and in Norfolk of nearly 16 per cent. I could name several other councils that face equally formidable increases. For example, Gloucestershire, which includes the constituency of my hon. Friend the Member for Tewkesbury (Mr. Robertson), faces an increase of almost 11 per cent.

Mr. Andrew Reed: Does the hon. Gentleman accept that the standard spending assessment is a complex issue? Last year, under a Conservative Government, my local authority of Charnwood—of which I was then a member—faced a 12 per cent. increase because of the changes in the SSA, despite the fact that it raised its spending only in line with inflation. Does he accept that, because the SSA is so complex, there will always be such variances?

Mr. Yeo: As I said in response to an earlier intervention, I recognise that any change in the SSA formula is likely to produce losers as well as winners, which is a matter of concern to those authorities and residents that are affected. Our concern is whether the capital financing adjustment is justified, why it was made and what its consequences will be.
The effects of the change are by no means confined to the shire counties that I mentioned. In Wakefield, for example, the increase in council tax will be nearly 12 per cent. and in South Tyneside it will be nearly 10 per cent. Even in London, where there will be elections on 7 May, there will be substantial increases—Hillingdon, for example, faces an increase of 12 per cent.

Mr. Gibb: Is my hon. Friend aware that none of those figures take into account the consequences of the Government's decision to end dividend tax credits paid into pensions funds, which means that there are further increases in the pipeline? The county council in West Sussex, which covers my constituency, is £4 million a year short because of that measure, which is equivalent to a further 3 per cent. rise in the council tax.

Mr. Yeo: My hon. Friend makes a most important point, to which the House will soon want to return, especially when, in the next few months, the results of the actuarial valuation are published. The Government have been waiting for those results to establish what action should be taken to deal with the huge burden that has been placed on all employers, particularly local authorities.
The pensions tax will lead directly to substantial increases in council tax or to substantial cuts in services unless the Government give an unequivocal assurance that the full amount of any shortfall—any additional employer's contribution that councils will have to make—will be covered by an increase in the SSA. The Government have refused to give such an assurance, which is extraordinary, as the more prudent councils may want to start taking into account that huge new burden in their longer-term spending plans. Without that assurance, they may find it necessary in the next budget round to start planning substantial service cuts or even more swingeing increases to the council tax.

Mr. Colman: I declare an interest as the chair of the United Kingdom standing committee on local authority superannuation funds. The average funding is just over


90 per cent. of the full funding level. For a number of local authorities, it is significantly higher—way above 100 per cent. The main reason why the figure is 90 per cent. is that, in 1990, the previous Government asked for a reduction in funding levels to 75 per cent. to pay for the implementation of the poll tax.

Mr. Yeo: The hon. Gentleman emphasises the gravity of the situation. If he is concerned that the funding level is inadequate, how can he support a tax that makes the position very much worse? He has made the case for the Opposition more eloquently than anyone has before. It is precisely because there is concern about funding levels in local authority pension funds that it is a disaster for the Government to refuse to give the assurance that the councils need.
Council tax payers in the various types of authority will face increases—if I had time, I could give a much longer list. The local authorities that I mentioned have one factor in common: they have all suffered as a result of the Government's decision to change the treatment of local authority debt that was incurred before 1990—in other words, to change the capital financing adjustment.

Mr. Colman: The constituency that I represent is covered by Wandsworth local authority, which has also "suffered"—to use the hon. Gentleman's word—because of the change. Will he join me in condemning the fact that Wandsworth has refused to reduce its council tax to the level that the Labour group wanted—£295—despite the fact that it was able to build up a balance of £30 million through the Tory years of special treatment?

Mr. Yeo: I am happy to debate with the hon. Gentleman—all day, if necessary—the merits of the London borough of Wandsworth, which is an absolutely outstanding example of how to run a local council. It is a byword for efficiency, innovation, satisfactory service and value for money, as the residents have shown by continuing to return a Conservative majority.
I had the pleasure of visiting Wandsworth the other day; it was the same day that I happened to visit Hampstead, in the London borough of Camden. In Wandsworth, I was told how public libraries were to be open on Sundays; in Hampstead, I was told that public libraries were closing—they were closed not only on Sundays, but on every day. That is the difference between an authority that embraces the opportunities of partnership with the private sector and is determined to continue increasing value for money and the quality of its services, and one that sits back and adopts the old socialist local government nostrums, which have been tried and which have failed so many times.

Mr. Brady: I was intrigued by my hon. Friend's mention of libraries. He may be interested to note that, in my constituency, the borough of Trafford, which is now under Labour control, has recently decided to close three public libraries. The Government are supposed to be championing literacy, but they are taking away money from the borough.

Mr. Yeo: My hon. Friend makes a most important point. That is another example of how the Government like to say one thing when their actions cause the opposite result. We have seen that time and again.
Each of the authorities that I have mentioned have suffered as a result of the change to the capital financing adjustment. On 2 December, in the statement on the revenue support grant settlement for next year, the Secretary of State for the Environment, Transport and the Regions confirmed—it can be found at column 161 in Hansard—that the council tax rise should be 7 per cent. if the Government continued to use the Conservative Government's figures and estimates on public spending. By the time that the Secretary of State and his fellow Ministers had finished fiddling the formula, many local authorities faced increases of double that amount—some of the ones that I have mentioned face increases substantially more than that.
My hon. Friend the Member for Altrincham and Sale, West rightly described the changes in the capital financing adjustment as a stealthy and hidden way of taxing people. As he pointed out, the effect of the change is to penalise local authorities that have chosen to repay their debts rather than to spend more money. That is a legitimate choice—many people would call it prudent. It certainly should not lead to council tax payers being penalised by a funding fiddle and a distortion of the formula.
Let us consider Hampshire county council, whose SSA was cut by more than £;3 million as a result of the change. Not surprisingly, on 2 January, the council wrote to an official at the Department of the Environment, Transport and the Regions about the change. It says in paragraph 14.1—in case the Minister's officials happen to have one to hand for his benefit:
Hampshire County Council considers the change to the 1990 debt indicator in the Capital Financing SSA a retrograde and unfair amendment to SSAs. It effectively transfers support from councils who prudently used capital receipts to reduce debt to those who used them to increase their capital programmes. Whilst this was a perfectly legitimate decision to take, it should not result in higher SSA. This breaches the fundamental principle that SSA distribution should not be influenced by the spending decisions of individual councils…councils like ours are being unfairly penalised for their prudent policies.
My fear, which I think may be shared by my hon. Friend the Member for Tewkesbury, as well as by my hon. Friend the Member for Altrincham and Sale, West, is that the change has been made not for reasons of need or because a careful study has been made of the relative levels of deprivation in one authority as compared with another, not because there has been some move of population, not even because the Government have reconsidered what kind of facilities are needed in places such as holiday resorts on the south coast, but purely for political reasons.
It is mostly—not all, I accept—Conservative local authorities that prudently repaid their debt, so it is mostly Conservative local authorities that suffer under the change. The trouble is that, whichever party controls the local authority affected by the change, it is the people who live in that area who suffer and will have to pay higher council tax, and will find that local authority services in their borough, district or county are reduced.
As the change rewards authorities that were high spenders, people are likely to suffer even more in the future. Councils can read signals as well as hon. Members. My hon. Friend the Member for Altrincham and Sale,


West was right to draw attention to this point. The Government are encouraging spendthrift councils and penalising prudent councils.

Ms Keeble: I am surprised that the hon. Gentleman regards the measure as unfair. Surely, if councils do not have capital spend because they have repaid debt, they do not need recognition of the impact of their capital spend on revenue budgets. Surely it is right that the Government should take cognisance of the impact of capital programmes that were approved by the Department of the Environment on revenue budgets. Otherwise, revenue budgets, especially for road improvements, get clogged up by the servicing of debts.

Mr. Yeo: The difference between us is simply that the Conservative party has a different approach. We believe that, if a council can see ways of saving money on behalf of its taxpayers, it should be encouraged to do so, not discouraged from doing so. That is why we structured the SSA calculation to give that encouragement. That is why I find the change so alarming, not just for this year—although it is bad enough for this year—but for future years. If councils are told, "Don't worry. Don't bother to do anything prudent. Don't say that you believe in saving or investment but just go ahead and be as extravagant as you want," that is what some councils will do. Not all councils will do so. Councils under Conservative control—too few at present, but about to increase in number, I am sure—are unlikely to respond to that signal, but other councils may do so. That is what is so worrying. People in those areas will suffer.

Mr. Andrew Lansley: I apologise to you and the House, Mr. Deputy Speaker, that I cannot be here for the whole of this debate.
The point that my hon. Friend makes is a good one. Does he recognise that the authorities that underspent on capital in respect of debt interest payments in relation to the SSA, such as mine in Cambridgeshire, were able to use that excess headroom to support service provision elsewhere? Is there not a corollary that those who were spending on debt interest over and above the SSA ought not to be bailed out so that they do not suffer the income detriment?

Mr. Yeo: My hon. Friend has put his finger on an important point which goes to the heart of the matter. I agree with what he says. I am glad that he has drawn attention to the record of his authority. Hon. Members on both sides of the House ought to be aware of the consequences of the change now and in the longer term for their local authorities and the people who live there.
On a number of matters, the Government have been at pains to lay great stress on the importance of consultation. I pay tribute to the volume of consultation papers coming out of the Minister's Department in recent weeks. I believe that we shall be getting some more on such alluring subjects as whether the Minister will honour the Government's election pledge to end crude and universal capping. We await that one with great interest. I hope that it will give some explicit answers, perhaps more explicit than the recent paper on best value, which left unanswered almost as many questions as it dealt with. If the Minister would like to give us any hints of what will be in the paper on capping, it would be riveting information for

those of us who have troubled to come along for today's debate. Everyone in the House has an intense interest in the financing of local government. It is not a particularly fascinating debate for those who do not have an interest, but we should like a clue about what is coming up on capping.
The Government have laid great stress on consultation. That is why I was surprised to read in the letter from Hampshire county council, to which I have already referred, in paragraph 14.3:
It was not the subject of consultation with the Local Government Association in this year's SSA SubGroup meetings.
I find it rather shocking that a Government who keep telling us that they want to consult before they make changes have slipped this one through. Perhaps they were afraid of the response that the consultation might produce.
Overall, the effect of the change has been to remove £52 million from the SSAs of shire counties. It has added £33 million to the SSAs of metropolitan districts. Once again, the Government's priorities are clear. When it comes to allocating public money, new Labour always favours the towns and hits the countryside. My hon. Friend the Member for Altrincham and Sale, West drew attention to Trafford council libraries in his constituency. We keep hearing from the Government that they are governing in the interests of all the people and want to respond to the recent impressive demonstration of concern by people from rural areas, yet when it comes to making a hard choice between town and country, they choose to take the money away from the shires.
Out of the 34 shire counties, all but two lose SSA directly as a result of this change in the methodology. Lancashire loses more than £3 million and will have to raise its council tax by 14 per cent. Essex loses close to £3 million and will have to raise its council tax by almost 15 per cent. Lincolnshire loses more than £1.5 million and will have to raise its council tax by more than 13 per cent. The list goes on and on.

Mr. Lansley: The list could go on. Will my hon. Friend reflect that it is not only that a county council such as mine will lose £1.5 million and will have to increase its council tax by 10.2 per cent. but that, as a consequence of capping—Cambridgeshire is capped at a relatively low level of council tax—it will have to cut services? There is a threat to close four old people's homes in Cambridgeshire alone.

Mr. Yeo: My hon. Friend is right. I am glad that he quoted Cambridgeshire. I should have included it on my list if I had realised that he would be present, but it is better that he should do so. He is also right to draw attention to the fact that not only is this about increases in council tax—painful as they will be for people who were told last year that Labour would not increase taxes—but it is a clear example of broken pledges even before we have had what we understand will be further substantial taxes on motoring. My hon. Friend is right to say that this is also about cuts in services. We shall see wholesale cuts in services throughout the country in the next few months, made by Conservative, Labour, Liberal and coalition councils. They all face the same dilemma. That is the direct consequence of the decisions made by the Labour Government since 1 May last year.

Ms Keeble: I thank the hon. Gentleman for giving way again. I appreciate that I have been up and down quite a


lot in this debate. I do not understand why councils should have to make cuts. If the SSA provides them with an element of spending to service debt and if your argument is that good councils have paid off their debts and do not need the money to service their debts, they should not have to raise revenue to compensate. That is my understanding of your argument.

Mr. Deputy Speaker: Order. The hon. Lady has been here long enough to realise the form of address.

Ms Keeble: That is what I understand the hon. Gentleman's argument to be. He undermines his own argument.

Mr. Yeo: Those authorities could see what the standard spending assessment calculations were last year. As we learn from Hampshire, they did not have a chance to express a view about the changes this year. I see the Minister shake his head. He will be able to respond in due course. I quoted from a letter.
The change clearly has an adverse effect on the authority's SSA. To compensate, it will have to raise tax or cut its services, and many authorities will do both.

Mr. Lansley: My hon. Friend has been generous in giving way to me, as I arrived late. Does he recognise that, last year, for authorities such as mine, a notional debt level was built into their SSA allocation and, because they had extinguished their debt, they could use that SSA for service provision whereas, this year, because of the Government's change in funding, that notional debt has been reduced, the SSA has been reduced, and the money is not available for service provision?

Mr. Yeo: That is exactly the point. I congratulate my hon. Friend on expressing it so succinctly. A change that was not based on an assessment of changing need, but was simply a financial change—made out of pique, I suspect, for political reasons—has reduced the resources available to authorities such as Cambridgeshire county council, which will therefore have to cut services, raise council tax or both. The service cuts will be painful for those who have relied on local authority services hitherto.
The settlement will be expensive for council tax payers throughout the country, especially in the authorities to which I referred. In the shire counties, the average council tax rise is almost 12 per cent.—three times the rate of inflation. Band D taxpayers in shire counties will pay an extra £120 next year. The average council tax rise across the country looks as though it will be about 8.5 per cent. Even in the metropolitan districts, the group most favoured by the Government, the increase will be more than twice the rate of inflation.

Mr. Reed: Does the hon. Gentleman accept that Charnwood borough council hardly represents an urban area, yet our council tax increase this year will be 7 per cent., and the Labour-controlled local authority there, in a shire borough, will raise its spending by 3.4 per cent. again, almost in line with inflation? Does he recognise that the urban-rural myth that he is trying to perpetuate is unacceptable?

Mr. Yeo: It is not a myth, but a fact, and it is unacceptable. It is revealing of the situation that we have

now reached that the hon. Gentleman gets up and says proudly that, in his area, the council tax will be up by only 7 per cent. If we had had a Conservative Government, that would have been the average for the whole country. A loyal Government Back Bencher would not get up and boast what a wonderful outturn it was for Charnwood that its council tax was up by only double the rate of inflation, and only double the rate at which actual spending has increased. That would have been the case across the country, had the Conservatives still been in government.
I have had rather longer than I expected to explore the subject, and I am grateful for that opportunity and for the contributions of my hon. Friends. There are plenty of questions for the Minister to answer. I hope that he will explain why the change is justified, and confirm that the consequences are as they have been described. I hope that he will give an assurance that, next year, proper account will be taken in good time of the concerns of authorities that are adversely affected by any proposed changes.
We have concentrated this morning on the capital financing adjustment, but, as the Minister knows, there were other changes to the SSA methodology about which we were concerned. It is an important and complicated subject, on which genuine consultation is necessary. I hope that he will give us some assurances about that.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I congratulate the hon. Member for Altrincham and Sale, West (Mr. Brady) on his success in securing this debate. By the end of it, he may feel a little less satisfied at having chosen the subject because a great deal of the innuendo and comment from his side of the House has been incorrect, is based on a misunderstanding of what has happened and has no substance in fact, as I shall demonstrate during the next 20 minutes or so.
As we probably expected, the debate has ranged more widely than the SSA element for debt repayment. It might therefore be appropriate if I make some general points before dealing with the specific subject raised by the hon. Gentleman.
This Government have a new agenda for Britain's future and a vision for local government's place in that future. We want to reinvigorate local government in ways that encourage increased democracy, with local people having the chance to have more of a say in the affairs of their council; increased autonomy, with more freedom for authorities to take their own decisions; increased accountability, with elected representatives being more visibly accountable for their actions; and increased partnership between central and local government and between local authorities and people, businesses and groups in their areas. As the hon. Member for South Suffolk (Mr. Yeo) observed, we are issuing a number of consultation papers that focus on those and other matters to encourage a serious debate about how we take forward the future of local government.
As part of the process required to achieve our aims, a review of local government finance is being carried out by our Department, working closely with local government, business and other representative organisations and other departments. Consultation papers on possible changes to aspects of the local government finance system will be issued over the next month or so, as part of the wider consultation on modernising local government.
The volume of local government business reflects the importance that we attach to local government. The local government agenda will keep us all busy over the current parliamentary term and, I hope, beyond it. We need to make prompt progress. Our agenda is positive. We are a Government who want to be judged on our success in improving the quality of life for all people and by the extent to which we have made a difference. The extent to which local government is delivering services efficiently and in an accountable way to local communities is extremely important to us.
On local government funding, all public expenditure programmes must be examined rigorously each year; local government spending, which accounts for a quarter of all public expenditure, is no exception. Decisions on local government spending must look not only at the pressures on local authorities, but at the scope for greater efficiency and effectiveness within local authorities.
We are committed to working within the public expenditure plans that we inherited from the previous Government. While keeping within existing spending targets, we have reorganised priorities. We have put £835 million more into education, every penny of which will be covered by an extra £835 million of revenue support grant. That is a better, fairer, more flexible settlement than in previous years and has allowed an increase of total standard spending by 3.8 per cent.
We have provided an extra £350 million for community care. We have also provided £1.3 billion for capital spending needs to improve the state of school buildings through the new deal for schools and £800 million extra for housing through the capital receipts initiative.
We are committed to reviewing the local government finance system in future years, but we will continue to expect local authorities to behave prudently and responsibly.

Mr. Gibb: I was interested in that list. How much did the Minister allocate to local government when he heard the July Budget and the announcement that dividend tax credits repayments would be ended? What assessment has he made of the impact that that will have on local authority pension funds?

Mr. Raynsford: The hon. Gentleman raises an issue which was raised in the earlier debate. He will know from earlier discussions that there is no impact in the current year as a result of that change. As the hon. Member for South Suffolk recognised, the actuarial assessment is currently taking place. The Government have always made it clear that as and when that assessment has been made and the net cost—I emphasise the net cost, after compensating savings have been taken into account, rather than the gross cost figures which are misleading and have been unwisely bandied about in recent months—is known, the Government will take those figures into account in framing the appropriate support for local authorities in future years. I repeat that there is no impact in the current year.

Mr. Brady: I am concerned by the Minister's suggestion that there is no impact in the current year. Surely the fact that there has been no actuarial revaluation yet does not mean that there has been no impact in the current year. It simply means that in a future year, when

the revaluation has taken place, a greater provision will have to be made to make up for this year when nothing has been done.

Mr. Raynsford: The hon. Gentleman fails to understand that local authorities must act on the basis of an actuarial assessment and that their contributions are fixed on that basis until the next valuation. When the next valuation takes place, the impact is taken into account and the contributions, net of savings which may result, will be decided. That is why there is no impact in the current year.
SSAs are the basis for the distribution of revenue support grant. They are based on measures of spending need that apply to all authorities and are discussed with local government representatives. I want to knock on the head one of the falsehoods that have been peddled this morning—the suggestion that the changes have been introduced by stealth and that local authorities had no opportunity to discuss them. That is not true. They were discussed at the SSA sub-group which discusses the local government settlement each year. The issue has been debated on numerous occasions and was raised at the sub-group this year.
The SSAs for 1998–99 were debated in the House on 5 February, and the local government finance settlement for 1998–99 has been agreed. Having said that, we are committed to a fair distribution of Government grant among authorities and believe that there is still scope for improvement in the arrangements in future years. My colleagues and I will look closely at the current SSA system. We will listen to local government views on how SSAs might be improved, both for 1999–2000 and in the longer term.
As the hon. Member for South Suffolk said, changes inevitably produce gainers and losers. Some authorities will plead for changes that benefit them—it is the nature of their role—and others will plead against them because they adversely affect their future prospects. That is why the Government must reach an informed judgment about the balance of merits and disadvantage in deciding what is best. That is what we have done this year and it is what we will seek to do in the future.

Mr. Lansley: The Government felt able to make changes to the SSA methodology for this year, but they failed to live up to their promise to introduce the changes recommended by the Elliott review into the area cost adjustment. Will the Minister give a pledge that the review will be completed in time for changes to the area cost adjustment to occur for the 1999–2000 financial year?

Mr. Raynsford: The area cost adjustment has been debated previously: the hon. Gentleman raised it in an Adjournment debate I answered some time ago. I made it clear at the time that we had undertaken to review ACJ this year before the settlement was reached. The fact that we have not carried out the proposed changes is simply a reflection of the fact that there was a stark division of opinion in local government about the impact. Some authorities—notably the hon. Gentleman's local authority, Cambridgeshire—were keen because they would gain from it. Others who would lose were opposed.
In our discussions, it emerged that there were possible alternatives, including a specific cost option, which had not been researched thoroughly. We believed—it is an


entirely responsible decision—that that research should be undertaken and evaluated before any final decision was taken on a matter that is inevitably controversial, as it benefits some authorities and damages others. That is in train and we will discuss it further when we have the benefit of the further research on the specific cost option.
If the hon. Member for Altrincham and Sale, West believes that the SSA system does not treat Trafford fairly, I would be happy to examine any proposals he has for different methods of calculation. However, I stress to him—and to any other hon. Member who raises these issues—that any decision has to be universal and the changes must apply to all authorities. We must consider the impact in the round—both the negative and the positive. We want to feel confident that the changes will produce a sounder assessment of need.

Mr. Brady: I thank the Minister for his generous offer to take account of any proposals I may make about a fairer way of assessing SSA for the borough of Trafford, provided they can be taken in the round. The point he made about gainers and losers is important. As a matter of generality and principle, will the change reward or benefit authorities with high levels of debt in the 1980s and penalise those with low levels of debt in the 1980s?

Mr. Raynsford: I will come to that point in a moment. I have advised the hon. Gentleman that he might not be happy with the evidence I shall present to him.
For 1998–99, we decided that it was sensible to change the method of calculating the capital financing SSA. During the 1980s, local authorities had a choice of whether to use capital receipts to pay off debt or to finance new capital expenditure. That choice was made available by the then Conservative Government and it continued until 1990. Decisions taken on whether to apply receipts for debt redemption purposes or for new investment were entirely legitimate, and authorities were perfectly free to come to a decision under the arrangements.
When SSAs were introduced in 1990, the previous Government decided to favour those who had applied capital receipts to debt reduction and penalise those who had chosen new capital expenditure by treating everyone as if they had chosen to use capital receipts to repay debt early. I stress that that was not a requirement of the regime that existed prior to 1990. There was a retrospective process of rewarding some and penalising others for decisions taken prior to the introduction of the new arrangements.

Mr. Yeo: Does the Minister think that it is wrong to reward prudent councils?

Mr. Raynsford: It was wrong to introduce regulations that had a retrospective impact when authorities had no way of knowing that they would be penalised as a result of acting in a way accepted by the then Government as entirely proper. It was a shabby change in the regulations and it caused widespread concern in local government. I am surprised that the hon. Gentleman is defending it.

Mr. Yeo: If the Minister thinks it is so shabby, why is he doing exactly the same thing now?

Mr. Raynsford: If the hon. Gentleman listens, he will hear that we are making a change to restore the fairness

that should have existed from 1990. We are not making a change that will benefit any authority as a result of their decisions on whether to use receipts for one purpose or another. Their decisions will have no impact on their SSA entitlement. Decisions taken prior to 1990—decisions taken one way or the other in a perfectly proper way within the rules that applied at that time—should not retrospectively result in an authority getting more or less SSA than they should be entitled to. That was the error of the Conservative Government. I am surprised that the hon. Gentleman is defending it.

Mr. Yeo: The only difference between what the Minister is doing now and what the previous Government did—which he says was shabby—is that the effect of the change made by the previous Government was to benefit prudent authorities and to damage spendthrift ones. In line with old Labour thinking on this matter, he is making the same type of change—the only difference being that he has chosen to benefit the spendthrift authorities and to hit the prudent ones.

Mr. Raynsford: The hon. Gentleman is wrong on this, as on so many other issues. The change is creating a fair framework that will treat all authorities on an equitable basis. The debt is being assessed on either the actual or the notional—whichever is the greater. This will be a fair system, reflecting the position as at 1990, so that authorities will be subject to a regime they can understand and of which they know the consequences. However, they will not be retrospectively penalised for decisions they took in good faith before that date—perfectly legitimately—for which the previous Government penalised them.
That was a typical example of the previous Government making assumptions after the event about how local authorities should have treated capital receipts. Authorities that had properly decided to use their receipts to finance new capital expenditure felt justifiably aggrieved. To correct this, we decided that the debt calculation for the 1998–99 settlement should be based on an estimate of 1 April 1990 debt which is the greater of actual or notional debt. This will enable authorities that chose in the 1980s to undertake capital expenditure rather than repay debt early to meet their unavoidable loan charges while allowing them to spend at SSA on services such as education, health and police.

Mr. Gibb: The change in the formula will result in West Sussex receiving £2 million less from central Government. How can that be fair?

Mr. Raynsford: The hon. Gentleman clearly has not been listening. Any changes in the formula will have an impact. There are gainers and losers. If he will wait a moment, he will understand that the changes will not have the consequences that he and his colleagues have suggested. They are not designed to reward the profligate and penalise the prudent. That is simply not the case, as I shall demonstrate in a moment.
By taking the larger of the actual or notional debt, we have ensured that other authorities that chose before 1990 to repay debt early will continue to receive SSA provision for the capital expenditure required to provide necessary services. Thus both groups of authorities are treated fairly, whereas the previous arrangement penalised one and rewarded the other.
As the hon. Member for Altrincham and Sale, West pointed out, the change to the treatment of debt at 1 April 1990 has resulted in a reduction in the SSA element of debt charges for some authorities, including Trafford.
That is not the case in Tewkesbury. As a result of the adjustment to the capital spending SSA, some —20,000 extra was given to Tewkesbury.

Mr. Laurence Robertson: rose—

Mr. Raynsford: From the hon. Gentleman's earlier intervention, he seemed to have a rather different impression.

Mr. Robertson: I am grateful to the Minister, who has been generous in giving way. I was quoting from the written answer that he gave me.

Mr. Raynsford: The hon. Gentleman must look carefully at the response. The overall impact was a reduction, because there were a number of changes. In terms of the change to capital financing, Tewkesbury was a gainer, so the change does not have an adverse effect at all on Tewkesbury, which demonstrates the incredible complexity of the process. When one is juggling a number of different indicators, there will be some that gain and some that lose. The overall impact is not terrifically predictable. That is why it is so important to try to ensure that we are as fair as we possibly can be.
It is inevitable that there will be some losers when there is a change to SSA methodology, particularly with a service such as debt charges, where the national amount is determined in relation to the amount that authorities will in aggregate spend on borrowing costs in the coming year. However, I am convinced that the change to the methodology was fair and proper. It was discussed with local authority associations in the SSA sub-group and the outcomes are a major improvement on the previous methodology. There would, of course, have been no need for any painful adjustments in the coming year if the previous Government had adopted a fairer basis for sharing the costs of borrowing when SSAs were introduced.

Mr. Sanders: Is the debate not connected to the use of the public sector borrowing requirement and how it impacts on local spending decisions on capital items? Does the Minister favour the alternative—general government financial deficit system—which would iron out many of the anomalies that stem from the 1990 changes?

Mr. Raynsf ord: The debate has ranged widely, but I suspect that I would incur your wrath, Mr. Deputy Speaker, if I were tempted to stray into the territory of the public sector borrowing requirement, which the hon. Gentleman invites me to do, so I shall stick closely to the subject of the debate—capital financing SSA rules.
It has been argued that the change allows authorities to influence their SSAs. That is one of the charges that the Opposition have made. Let me make it absolutely clear that we have no intention of allowing authorities to take decisions that will affect their SSA entitlement. The adjustment simply reflects the position before the

introduction of SSAs in 1990. There is no possibility of authorities taking decisions that will influence their entitlement in any way.

Mr. Lansley: The Minister is mis-stating the proposition in order to attack it. The point is that, through the change, he is seeking to replace a notional basis of debt calculation in an SSA with an actual debt calculation from the 1980s, when the SSA, as we know in respect of expenditure, is a notional rather than an actual figure. It is not a target for spending but an assumed level of spending, just as there was an assumed not an actual level of debt.

Mr. Raynsford: The hon. Gentleman has clearly not been following the debate closely. The whole basis of the assessment is to ensure that legitimate decisions taken by authorities before 1990, when the new system was introduced, should not have an adverse impact on authorities' entitlement to SSA.
Neither does the change condone creative accounting. The suggestion that it does is one of the more preposterous arguments advanced by the Opposition this morning. Any creative accounting would, by definition, have been used to get outside the normal borrowing procedures. It is not taken into account in the provision of SSA cover for debt repayment.
It has also been argued that the change to the debt charge methodology is designed to favour so-called high-spending profligate Labour authorities at the expense of low-spending Conservative authorities. That is not the case. It is always difficult to convince Opposition Members of this because there are so few Conservative authorities left where one could demonstrate the impact, but one of the largest gainers from the change is the royal borough of Kensington and Chelsea. I hope that the hon. Member for Altrincham and Sale, West will recognise either that that borough is profligate and Labour controlled or that his argument is false.
The reality is that the royal borough of Kensington and Chelsea has been Conservative controlled throughout the past 20 or 30 years and is one of the largest gainers from the change, which entirely kills the preposterous argument that we are acting in a partisan way.

Mr. Brady: I thank the Minister for giving way once again, but is the best that he can do to find a particular case that he claims disproves the generality of the situation? Boroughs such as Trafford, which was under Conservative control throughout the 1980s and, like many other local authorities, ran its affairs prudently, are being punished. The Minister cannot escape from that by using Kensington and Chelsea as an example.

Mr. Raynsford: I thought that the hon. Gentleman might say that, so I have some examples of prudent authorities that have been penalised as a result of the changes. Those suffering a larger reduction than Trafford include Lancashire, Sunderland, Coventry, Liverpool and Tower Hamlets. Does he regard those as prudent, well managed and being penalised unfairly? If he does not, his argument is false.

Mr. Brady: The principal mass of authorities that are being hurt by the measure are in the shire counties.


My authority, and others that the Minister has named, may be exceptions of metropolitan areas that are suffering from the Government's attack, but the shire counties are losing £50 million.

Mr. Raynsford: The hon. Gentleman is extremely confused if he believes that Liverpool, Tower Hamlets, Sunderland and Coventry are shire counties. Even my authority, Greenwich, is in virtually the same position as Trafford, so I hope that Opposition Members will recognise that the change has been introduced because we believe that it is right, not because of its impact on the party political nature of any authority, or on particular benefits to any local authority.

Mr. Yeo: No amount of selective quotation from the list of more than 400 authorities can alter the fact that it is primarily, but not all, Conservative authorities that have been penalised, and it is primarily spendthrift Labour authorities that have benefited. If the Minister publishes the complete list in Hansard, those facts will be apparent to even the most casual reader.

Mr. Raynsford: The hon. Gentleman, like his hon. Friends, is confused. That intervention was in the same vein as his speech, which was full of inaccuracies and verged at times on the hysterical. He made a number of ill judged and unfounded allegations. The reality is that we have introduced the change because we believe that it is logical and that there is justice in it.
The particular circumstances of metropolitan districts such as Trafford are recognised in SSAs in several ways, including population density, shared facilities and various indices of need.
Trafford's 1997–98 SSA has increased by £4.75 million—3 per cent.—for 1998–99. That is the figure arrived at after adjustments for changes in function have been made. Much of that rise is due to the adjusted increase in SSA for education, everyone's top priority service, which in Trafford represents an extra £4.031 million—a 5 per cent. increase. The hon. Member for Altrincham and Sale, West must recognise that the Government are putting money into education in his area, which is right both for the nation and for the people of Trafford.
The RSG distribution for the 1998–99 settlement is a closed matter, following approval of the local government finance settlement by the House on 5 February, and it will not be reopened. It is now up to authorities to set their budgets in the light of all their circumstances, including the provisional capping principles.
We shall consult widely on the best way to take forward the future financing of local government. As I have already said, we are issuing several consultation papers, and will enter detailed discussions with representatives of local government on the matter. We also intend, as my right hon. Friend the Deputy Prime Minister has made clear—

Mr. Deputy Speaker (Mr. Michael Lord): Order.

Parliament (BBC Coverage)

11 am

Mr. Denis MacShane: I am grateful to have been allowed a debate on this important issue. I declare an interest—the profound debt of gratitude I owe to the BBC for having dismissed me some 20 years ago. I joined the corporation as a journalist straight after university, and had a wonderful six or seven years.
However, I became involved in politics, standing for Parliament in Solihull in 1974 and arguing, in the way that embryonic politicians do, that the BBC should change itself. I argued that it should allow women to read the news, and should employ more black and Asian journalists. At the time, those were outlandish ideas. I also said that BBC journalists should be better paid—a preposterous notion.
Alas, I committed an inexcusable professional error, so the BBC, rightly and condignly, dismissed me. That probably saved my sanity. I cannot imagine what would have happened to me if I had remained a BBC employee.
I do not want the debate to take the form of BBC bashing, which is an occupational malady for politicians. Politicians who complain about the media are rather like sailors who moan about the weather, and spin doctors who complain about the media are rather like snakes who protest about being in the snake pit.
We are discussing not so much the right of Members of Parliament to be heard on the BBC as whether the BBC is taking steps that will lead to its decoupling not so much from Parliament as from the people.
I am no unconditional worshipper of Parliament. Frankly, much of what is said here is tawdry, tedious and, as we have heard during some recent days and nights, time-wasting. The modernisation of the House is long overdue. The people's will and the people's voice have been heard, are being heard and will be heard in many different ways; expressions of the people's views will be heard other than through the House.
I would make a small wager that Parliament will survive. Ministers will come and go, Speakers and Deputy Speakers will come and go, but Parliament will go on and on. The purpose of the debate is not to substitute Parliament for the editorial control of the BBC, but gently to suggest that the BBC may not survive as a publicly funded institution if it insists on de-linking itself from Parliament.
Politicians, separately from what is heard in the House and its Committees, will of course continue to be heard on the airwaves. Ministers will queue up to be "Paxmanned", and will stumble out of bed for early morning television and radio shows. I do not suggest that the voice of politicians is likely to be unheard or even reduced.
The voice of politicians as Ministers, as the Executive, will continue to be powerfully heard, and the rent-a-quote merchants, the stunt boys and girls who force their way on to the airwaves now and then, will be heard, too. Indeed, if the BBC reduces its parliamentary coverage, we shall see more of politicians in other ways, on the streets with stunts and cheap campaigns designed to get coverage.

Mr. David Winnick: Although the BBC has a justifiably excellent reputation both in Britain


and abroad—we must remember what happened during the attempted coup in the Soviet Union in 1990—what sort of BBC would there be without this place? Without parliamentary democracy, the BBC would be merely a state organ, such as exists in countries that lack parliamentary democracy. Is it not a pity that the BBC bosses do not recognise that?

Mr. MacShane: My hon. Friend makes a valid point, but I am trying to keep my speech as short as possible so that as many hon. Members as possible can contribute to the debate.
We are not talking about politicians being kept off the airwaves; the loud, the powerful and those who represent Government will always get a hearing. However, beyond those people are the myriad voices and views of Members of Parliament working in the House and in its Select and Standing Committees, raising all sorts of issues and reflecting all sorts of perspectives.
It is true that many of those are "off message", as we now say—idiosyncratic or difficult. So be it. The BBC may want to make its coverage of Parliament as bland as possible, but we do not have to sit idly by while that happens. It is essential that the House, and, through the House, the nation should understand what is happening.
The BBC is proposing a fundamental and permanent downgrading of its parliamentary coverage. First, "Yesterday in Parliament"—probably the main link between Parliament and the people—is to disappear. Secondly, "The Week in Westminster" is to lose its present format and slot. Thirdly, the excellent "In Committee" programme is to go.

Mr. Robert Sheldon: My hon. Friend may not be aware that the Liaison Committee, which consists of the Chairmen of all the Select Committees, met last week and authorised me to write to the chairman of the BBC about the importance of "In Committee"—a letter to which Sir Christopher Bland has replied.
Select Committees now have much more important tasks, seen by the public, than they used to. On many days, including today, what happens in them is front-page news. However, such items do not show how Committees come to their conclusions, which is of enormous importance. Would it not be a disaster if the BBC failed to recognise its obligation in such an important matter?

Mr. MacShane: I am most grateful to my right hon. Friend. One of the critical remarks often made about the House is that, as today, the green Benches are relatively empty. However, it was ever thus. When Sir Martin Gilbert, the distinguished biographer of Winston Churchill, walked around here with me once, he said, "Do you know that, when Winston Churchill made those memorable speeches warning of Nazism in the 1930s, the House was empty?" It is not the presence of Members on the Benches that makes the debates and the voice of the House important, but what is said here, free of any influence other than the duty to conscience, constituents and the national interest.

Mr. David Davis: I commend the hon. Gentleman on his excellent judgment in choosing the debate, and also on his opening remarks, one of which I believe was a quotation from Enoch Powell.
May I reinforce what was said by my predecessor as Chairman of the Public Accounts Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon)? Of course, Select Committees' deliberations occasionally make the front page of the newspapers, but the only leverage that a Select Committee has—this is much truer of the other Select Committees than of the PAC—is exposure to the light of the aspects of government that it scrutinises.
The "In Committee" programme provides the only real exposure that the scrutiny carried out by many Select Committees receives, and it is vital not only for the task of the BBC but for our task. If the BBC removes "In Committee", as appears to be the plan, it will cut the effective powers of scrutiny of the House of Commons.

Mr. MacShane: I hope that the chairman of the BBC will listen to those two powerful interventions from the previous and present Chairmen of the most important, senior and influential Committee of the House.
As I said, "Yesterday in Parliament", "The Week in Westminster" and "In Committee" are to go. BBC2's morning report of Parliament will disappear and I understand that the BBC is threatening to do away with the regional television parliamentary programmes. Any one of those changes would have been cause for concern, but in their ensemble, they represent a concerted attempt to downgrade coverage of Parliament in a fashion unprecedented in the BBC's history.
In its defence, the BBC has been disingenuous, if not deceitful. Its army of spin doctors has been fanning out, pretending that what is proposed is only a minor change. Yet at stake is nothing less than a dismantling of mainstream, accessible broadcast coverage of Parliament. The transfer of programmes to graveyard slots or on to the ghettos of long wave, or the absorption of parliamentary coverage into generalised current affairs programmes, will massively reduce the opportunity or choice of listeners to hear what is said in Parliament.
I am particularly concerned about the BBC's cleansing of "Yesterday in Parliament" from the "Today" programme. It has been more than disingenuous in its justification of expelling parliamentary coverage from "Today". The BBC says that, as soon as Members of Parliament come on to the air, audiences plummet, but the BBC's figures do not remotely justify that claim.
The chairman, in his letter to Madam Speaker dated 21 November 1997, said that Radio 4 loses 1.3 per cent. of its audience between 8.30 am and 8.45 am and, when "Yesterday in Parliament" comes on, it loses 0.9 per cent. Frankly, 0.9 per cent. is not a massive loss. Most people have finished their breakfast and are on their way to work after 8 o'clock, and that is when the "Today" audience plummets.
According to the chairman's own statistics, in the period between 8.30 am and 9 am, it is the sweet and caressing tones of Jim Naughtie and Sue MacGregor that lose more audiences at a faster rate than the voice of parliamentarians.

Mr. David Davis: The hon. Gentleman will not be invited on to the "Today" programme again.

Mr. MacShane: Alas, the only time I was on the "Today" programme was when I attacked the BBC, so I have some hopes. Those who stay on message never get on it.
What else do we know about the audience for "Yesterday in Parliament"? Between June 1996 and June 1997, the audience for "Yesterday in Parliament" went up, not down. We also know that, when other material is broadcast in the Monday morning slot, the audience is no greater. We also know from evidence given by the BBC to the Select Committee a fortnight ago that only 80 per cent. of Britain can receive long wave, to which the BBC proposes to transfer "Yesterday in Parliament". If one goes into Dixons to buy a modern radio, one often finds that long wave is not available on the radio.
We know, too, that up to 1.3 million people—about the combined sales of The Times, The Guardian and The Independent—are connected to Parliament on week-day mornings. That is a goodly part of the population. "Yesterday in Parliament" represents less than 1 per cent. of all that Radio 4 broadcasts, so sacrificing it seems wholly unnecessary. Its slot in the "Today" programme is vital because, like it or loathe it, "Today" cannot be ignored; it is our national newspaper of the day. It is not just for Members of Parliament or, as The Guardian so charmingly put it the other day, for pointy heads and policy wonks—whoever they are. It is listened to by civil servants, business leaders, journalists and teachers throughout the country, wanting to hear, wanting to know, getting a chance to learn what Members of Parliament have to say in the Commons and in Select Committees and what is said in the other place.
Listeners can hear the awkward squad—those parliamentary roundheads and cavaliers who dare to be Daniels, who dare to stand alone, who dare to have a purpose firm and dare to make it known. Cleansing them from the "Today" programme may suit some spin doctors on both sides of the House and the Executive, but their voices should be heard.
Still, the BBC, like all great bureaucracies, is made of rubber; it comes bouncing back with unconvincing arguments. "We are giving you more time," it says—yes, but fewer listeners. As the Critical Quarterly, in its remarkable black paper on education, put it 30 years ago, "More means worse." We already have a parliamentary channel on cable broadcasting Parliament around the clock. Hansard is available on the Internet. Wall-to-wall coverage of Parliament will not help anyone.
As a former journalist, I am particularly saddened because "Yesterday in Parliament" is a superb piece of broadcast journalism. It distils, into a little under 15 minutes, 12 or more hours of parliamentary proceedings. Extending it to 30 or 45 minutes, or even two or three hours, will weaken the force of that journalism. I do not want more Members of Parliament on the air, but I want the nation and its listeners to have the possibility of hearing what is said and done in the House in their name at a time and on an airwave when they are tuned in.
I have said that the BBC's arguments are disingenuous. Its statistics simply do not add up. But the BBC has been more than disingenuous; it has been deceitful in promising that real consultation would take place. In essence, what was floated, proposed and lobbied for last summer is what will take place.
I do not like to use the word "contempt". That is an overused word in Parliament. But the BBC chairman has not been straight with the Speaker. As so often happens

to the great and the good when they accede to that post, they immediately go native and become mouthpieces for whatever the BBC bureaucratic moloch wants to do.
We must be realists. The BBC is not King Charles I in a fight with the Commons. The world will not stop if 15 minutes of my hon. Friend the Member for Bolsover (Mr. Skinner), the right hon. Member for Kensington and Chelsea (Mr. Clark), my hon. Friend the Member for Linlithgow (Mr. Dalyell) or the hon. Member for Billericay (Mrs. Gorman) are replaced by Mr. Humphrys making sure that no Minister or shadow spokesman can form a sentence with a beginning, middle and end without being interrupted.
Yet I fear for the future if the BBC refuses to listen and act on this debate. If the BBC thinks that Parliament is no longer important, the time may come when Parliament attaches no importance to the BBC. As someone who believes in the BBC, I ask myself whether that is the end game—a furtive, shabby, dishonest decoupling of the BBC from its unique character in the world as a publicly funded, editorially independent but parliamentary accountable broadcaster.
Are those who dream of privatising the BBC—we know some of their names—pushing forward that agenda? The broadcasting of parliamentary proceedings in a mainstream outlet of the BBC is nearly as old as the BBC itself. In ending that service, the BBC is telling the nation not only what its chairman and his officials think of Parliament, but he is announcing urbi et orbi, that the marriage between the BBC and the British public may be drawing to a close. Is that what the BBC wants? Is it what Britain wants? I urge the chairman, even at this late stage, to think again.

Mr. Paul Tyler: I am delighted to follow the hon. Member for Rotherham (Mr. MacShane) and I congratulate him on securing the debate. He supported me when I raised the issue at business questions some 10 days ago, and I am delighted to endorse every word that he has given us this morning. I am sure that other hon. Members on both sides of the House will share that view.
My text is C. P. Scott:
Comment is free but facts are sacred",
which we might update by adding that commentary is fun but reportage is serious and sacred. That is what we are discussing today. We are addressing not simply the numerical figures of audiences or the new ghetto which will be created for those who take an interest in our proceedings, but the character of some of the programmes that the BBC now proposes to give its listeners and viewers.
It is not only Members of Parliament who have considered those programmes to be important in the past. The BBC itself has always viewed those programmes as extremely important and as part of its duty to its public and the nation. I have quotations from several episodes in the BBC's history to prove that point. The BBC's annual report and accounts for 1945 state:
From the opening of the new Parliament in August 1945, a quarter hour period (10:45 to 11:00pm) was devoted in the Home service to a summary of each day's proceedings, under the title 'Today in Parliament'. This made it possible to keep listeners more closely informed on Parliamentary matters.


In 1946, the then assistant Postmaster General, Mr. Wilfred Burke, said:
Another new condition is one to which the House will attach considerable importance. That is the new obligation laid upon the Corporation to broadcast a daily report of the proceedings of both Houses of Parliament.
No less a person than Mr. Herbert Morrison, the then Lord President of the Council, said in 1946:
It is one of the duties of the BBC to keep the country informed about Parliament.
In 1982, a report from the House of Lords Select Committee on Sound Broadcasting stated that the BBC
shared the wishes of members of both Houses that the proceedings of Parliament should reach as wide an audience as possible; in their judgment"—
the BBC's judgment, not that of the House of Lords—
the new format of 'Yesterday in Parliament' was more likely to achieve this than the old.
The BBC's annual report in 1985 stated:
Recorded actuality from both chambers and from committees regularly finds a place in news and current affairs programmes in the networks, the regions and local radio where there has been growing demand.
There was no sign then of the BBC claiming that parliamentary coverage was, literally, a turn-off for its listeners and viewers. The 1985 annual report also commented:
The BBC's commitment"—
a strong word—
to full and serious reporting of parliamentary affairs is reflected in such programmes as 'Today in Parliament', 'Inside Parliament' and 'The Week in Westminster' where recordings are used to good effect. The new format of 'Yesterday in Parliament' within the 'Today' programme has improved audiences.
As the hon. Member for Rotherham said, that comment does not suggest a falling audience—far from it.
Perhaps the most important statement of all was made last December by the Minister for Arts, whom I am delighted to see in his place on the Government Front Bench. He said that the BBC agreement
contains one specific programming requirement introduced…in 1948 and re-iterated in 1996, that the corporation 'shall transmit an impartial account day by day, prepared by professional reporters, of the proceedings in both Houses of Parliament.—[Official Report, 11 December 1997; Vol. 302, c. 1258.]
Given that background of commitment to regular reporting and its importance to our House, the other place and the world at large—the programmes are popular and people want them—why are we now given several extraordinary excuses as to why those programmes no longer have a place in the schedules? The hon. Member for Rotherham effectively dealt with the ludicrous argument about the fall in audience between 8 am and 9 am. It is absurd, and I do not know how anyone could come before the Speaker or any other House authority and pretend that that was a good reason.
The figures show that, outside the "Today" programme itself, there are more listeners for "Yesterday in Parliament" and "Today in Parliament"—the listenership is growing—than for any other programme on Radio 4 except "The Archers". I am devoted to "The Archers", but if we have to start having murders, suicides or tractor accidents to persuade the BBC that we are important

enough to be broadcast at a reasonable hour, that implies that the BBC is tearing up the commitment given under Lord Reith and in every era since.
I come from a scattered and sparsely populated rural area in Cornwall and I am, therefore, especially concerned about the notion that long wave is somehow an adequate substitute for FM. That is patent nonsense. Ever since this debate was announced, I have tried to persuade the BBC to provide me with a map to show the coverage of the United Kingdom achieved by long wave. I am told by the BBC that it is an "imprecise science"; in other words, it does not know. It can provide a map of the FM coverage of the United Kingdom, but it cannot provide a map that shows the areas in which long wave is easily received. Even some parts of London find it difficult to achieve good reception of long wave. The sudden suggestion that the quality of the receivers and the transmitters will be dramatically improved in weeks so that everyone can listen to long wave is patent nonsense.
All those arguments were "exposed"—I use the word advisedly—by Mr. Peter Hill in The House Magazine in October last year. He wrote a skilled, careful, scientifically based article, as we would expect from a former senior and distinguished reporter of the BBC. I find it extraordinary that the chairman and senior officials of the BBC are still repeating the arguments that have been so effectively disposed of. At a cross-party meeting that several hon. Members had with the controller of Radio 4, he was still repeating some of those arguments even when they no longer held water.
As I implied at the beginning of my speech, I believe that there is a hidden agenda behind the BBC's moves. It is not simply a numbers game, because the very character of the programmes is at risk. I shall take one example of that. "The Week in Westminster" is to move to Thursday evening, which will more than halve its audience, and that is bad enough. However, as a sop to the House, the BBC proposes to broadcast the programme in weeks in which the House does not sit. How can a programme called "The Week in Westminster", which purports factually to report parliamentary matters, be broadcast when the House is not sitting? The answer must be one of two options. Either the programme will become a report of the week in Whitehall and be all about the Government, not the House—but that is not what the BBC is pretending—or it will not be reportage at all, but commentary. We have a huge amount of commentary already on all channels, radio and television. We ask only that a small portion of the schedule is consistently addressed—every week and to a real audience composed of the whole United Kingdom—to reportage of the Houses of Parliament, including, as the hon. Member for Rotherham said, what happens in the Chambers and in Committees.
By definition, "The Week in Westminster" on a Thursday evening will not look at the whole week. It will contain nothing about Fridays. Is Friday now unimportant in the House? If so, someone should tell the Speaker, the Whips and the House officials. It appears that Friday will no longer exist, simply because the BBC, at the stroke of a pen, is to dispose of the programme to Thursday nights.
More important, "The Week in Westminster" would dramatically change in character. It would no longer report what the nation's representatives are saying and


doing in this place—it would be about the Government or would be a commentary on the parties and political affairs outside this place.

Mr. Nicholas Winterton: I have followed the hon. Gentleman's speech carefully and he is doing a great service to the House. Does he agree that, to all intents and purposes, the executives of the BBC are trivialising and making peripheral what goes on in Parliament? We do not want that, and I do not believe that that is what the people of this country want.

Mr. Tyler: I agree with the hon. Gentleman. We do not agree often, but he has put the point succinctly and it leads precisely into my concluding point. Those who want to see and hear their parliamentary representatives working in this place, representing them, will be treated by the BBC as a tiny, insignificant and unimportant minority. They will be consigned to a scheduling ghetto. That is not just an insult to Parliament but an insult to our constituents and to the BBC's listeners and viewers. I hope that the BBC will think again.

Mr. David Winnick: The other day, I received a note from the public affairs unit of the BBC—I presume that one has gone to other hon. Members—that began "Dear David" and asked whether I would signal my support for the proposals. It is surprising that I received such a note, whether it began "Dear David" or otherwise, bearing in mind my earlier interventions on the matter, including my Adjournment debate on 11 December 1997, during which I was, to say the least, extremely critical of the proposals. My hon. Friend the Minister replied to that debate, as he will to today's.
As my hon. Friend the Member for Rotherham (Mr. MacShane) and the hon. the Member for North Cornwall (Mr. Tyler) said, we must emphasise that what appears to be a technical matter—broadcasting on long wave or on FM—has great relevance to the proposals. I said in my Adjournment debate that "Today in Parliament" had lost more than half its audience since it went over to long wave in 1994. Parliamentarians as well as listeners would agree that it is an excellent programme. It is perhaps too long for the morning, but in the evening it provides good coverage of what has gone on in both Houses of Parliament. The BBC must have known that putting "Today in Parliament" on long wave would substantially reduce its audience. The BBC cannot be naive about the matter, and I can think only that it deliberately made the change because it believes few people want to listen to Parliament's proceedings and few are obsessed by politics and current affairs, and that it could find other listeners.
As the hon. Member for North Cornwall said, the BBC is making a great deal of the fact that the Friday programme, which is briefer than the Monday to Thursday programmes, will be extended. However, that late evening programme, which is the only one broadcast on FM, will move to long wave only, so there will be no real gain for it, as the BBC is perfectly aware.
The BBC has taken a propaganda line since last July when the proposals were leaked. Points of order were made in the House, and hon. Members will remember that

Madam Speaker said that she was displeased by BBC proposals, but, all along, the BBC propaganda line—as has been shown during the debate—has been that people switch off because they are bored by the 15-minute or 16-minute recording of what occurred the previous day in Parliament. The reasons for fewer people listening from 8 am have been stated, although the BBC was originally reluctant to give the figures. Even now, the audience of "Yesterday in Parliament" is well over 1 million, which is larger than that of "Newsnight"—who knows what proposals the BBC has for that excellent programme?
Most people have no desire to switch off at all. I rang the BBC during the summer recess to ask how many people were listening to the substitute slot. The answer was that there was little difference between the number of people who listen to "Yesterday in Parliament" and those who listen to the substitute slot when Parliament is not sitting. Where is the evidence that listeners are bored and fed up with listening to parliamentarians for 15 or 16 minutes a day, and switch off such programmes when they come on air? There is no reason to believe that there is any truth in the BBC propaganda line.
The controller of Radio 4 said last summer that 350,000 listeners switched off when "Yesterday in Parliament" came on in the morning, but the BBC is now reluctant to repeat that comment. My hon. Friend and the hon. Member for North Cornwall explained that people switch off between 8 am and 9 am for obvious reasons: they are taking their children to school, going to work, and so on. The BBC was willing to use its propaganda line, when it seemed that it might be effective, to discredit the reporting of Parliament.
One cannot have a great deal of respect for people who use such tactics, but I have the greatest respect for the journalists who are involved in "Yesterday in Parliament" and the evening programme. One can criticise from day to day, and ask why one item has been excluded and another has been given so much time, but the people involved are skilled, and there is no doubt that they do an excellent job, and have done so on radio and television since the broadcasting of the proceedings of the House. Their position is being undermined by their bosses, who give the impression that what they do is not of great value, which is unfortunate.
I shall not mention the other changes, because my hon. Friend and the hon. Member for North Cornwall discussed them in detail. The essence of the matter is whether the BBC recognises that it has a public service duty adequately to report the proceedings of Parliament. I have concluded that the BBC has a different view. I have said that I have the greatest respect for the BBC, its coverage and the way in which it broadcasts overseas events. I referred to the attempted coup in the Soviet Union, and said that it took place in 1990, but I was a year out: it took place in 1991. One remembers that Mr. Gorbachev learned the details of what was going on from the BBC.
One wants to defend that fine reputation; indeed, whether the BBC has been underfunded or had difficulties with the Foreign Office over funding for its overseas broadcasts, parliamentarians have come to the rescue and intervened constructively. Unfortunately, the view on domestic matters, and certainly on the reporting of Parliament, is that listeners are not interested in politics, and any old excuse is made to cut such reporting. Hon. Members are right to think that Ministers and spin doctors


will benefit at the expense of parliamentarians. I do not believe that should happen without a great deal of criticism.
I said in business questions and repeat today that we know what sort of institution the BBC would be without this place and without parliamentary democracy. Its freedoms, like the freedoms and civil liberties of all the people of this country, come from one place only—the Houses of Parliament, where the rule of law is established. It is unfortunate that the BBC does not recognise that and act accordingly.
The proposals, which I understand the chairman of the BBC will discuss when he comes to the House on Thursday, should be thrown in the dustbin. Despite all our protests, including that of Madam Speaker, the chairman, the director-general and the controller of Radio 4 may push them ahead. That is their right, and we cannot tell them what to do, but if they treat Parliament in such a contemptuous way, and refuse to listen to our justified criticism, we shall inevitably show contempt for those who control the BBC.

Mr. Nicholas Winterton: This is a unique debate. I am not entirely sure, because my hon. Friend the Member for North Thanet (Mr. Gale) has just entered the Chamber, but I suspect that there will be virtual unanimity on the anxieties expressed by the hon. Member for Rotherham (Mr. MacShane) about the BBC proposals for the reporting of Parliament.
Yesterday, I chaired a meeting of the all-party media group, at which Matthew Bannister put the case for the BBC. He put a good case, but a number of people disagreed with it. I repeat what I said in my intervention on the hon. Member for North Cornwall (Mr. Tyler): the BBC is seeking to peripheralise and trivialise the coverage of Parliament. That concerns me very much. I have been here for more than a quarter of a century, and over that time the BBC's serious coverage of Parliament has been reduced. I believe that the current proposals will reduce it further.
The hon. Member for North Cornwall referred to Peter Hill, a BBC journalist with considerable experience, who is totally committed to Parliament and who covers it remarkably well. As has been said, last autumn he wrote an article severely criticising what the BBC intended to do. Nor do I think that the House should take lightly the concern expressed by Madam Speaker. It is not often that the Speaker of the House of Commons publicly states her concern about what is going on, but Madam Speaker believes fervently in the role of Parliament, and thinks that it should be covered properly by the BBC.
Uniquely, I must agree with every word said by the hon. Member for Walsall, North (Mr. Winnick). He and I are generally very much on opposite sides. It is good to note the virtually unanimous condemnation—I use that word advisedly—of what the BBC intends to do.
I shall not repeat the arguments about the change from FM to long wave, for the simple reason that they have already been fully and accurately deployed; but I sometimes wonder why the BBC keeps referring to audience figures. I believe that the figures are wrong. Moreover, the BBC is funded in a unique way, and, in accordance with its charter, has a serious commitment to providing a public service. That commitment will be greatly damaged if it implements its proposals.
I mentioned Matthew Bannister. He is very articulate. I knew him for many years before he rose to the higher echelons of the BBC, and I have a high regard for him and his ability. When he came to the all-party media group last night, however, it seemed to me that he was very much carrying out the instructions of his media bosses. As my hon. Friend the Member for North Thanet will confirm if he catches your eye, Mr. Deputy Speaker, he tried to justify the proposal by saying that, far from cutting coverage of the House, the BBC was giving it extra time.
As the hon. Member for North Cornwall pointed out, the BBC says with great sincerity that it will broadcast "The Week in Westminster" when the House is not sitting. I agree with the hon. Gentleman that "The Week in Westminster" will become a programme about Whitehall and government. It will consist merely of reporting and comment, rather than being a serious programme giving people what I think they want to hear. As an evergreen Back Bencher, I think that it is important to Members of Parliament that their constituents can hear what their representatives have said on the Floor of the House from time to time—with, of course, appropriate editorial treatment. After all, we believe—mostly—in the impartiality of the BBC's editorial staff.
It is amazing how many letters I receive from constituents saying, "Oh, Mr. Winterton, I heard you say so-and-so in the House of Commons last week." I find that very rewarding, and I think that rather more people follow what goes on here than the BBC would have us believe. You may say that this is not the right place for me to say this, Mr. Deputy Speaker, but Mr. Tony Hall, the head of BBC news, is coming to the all-party media group on 25 March, and I hope that as many people as possible will come and tell the BBC's senior executive exactly what they think of its proposals. As an Opposition Back Bencher, I cannot stress enough how concerned I am, and how important I consider the BBC's public service duties.
Let me say to the hon. Members for Rotherham and for Walsall, North that I am not one of those Conservative and Unionist Members who believe that we should privatise the BBC or, force it to raise funds from advertising. I have never believed that, although I want it to become commercial in the sense of exploiting some of its services—for example, the tapes and compact discs that it produces. I think that it could market those more aggressively, and thus increase its revenue. It does a pretty good job—which could, however, be improved—in selling its fantastic programmes overseas; but it has a prime duty to give Parliament adequate coverage. I do not want to go into this in depth, but the BBC is right in saying that long wave is unreliable in many parts of the country. Is it therefore surprising that the BBC can state that audiences have been reduced, when not many people can receive long wave broadcasts of the standard that they expect?
I congratulate the hon. Member for Rotherham on securing the debate, and on the reasoned and robust way in which he put his case. His view is shared by Conservative Members and by the minority parties, particularly the Liberal Democrats. I hope that the unanimity in the House continues, and that, when Sir Christopher Bland and John Birt come to the House to try to explain what they are doing, they will receive a positive response. They, too, are coming to the all-party


media group later in the year, on the day when they publish the BBC's annual report. We have a responsibility to give them a platform.
I agree with the hon. Members for Rotherham, for Walsall, North and for North Cornwall. We must not allow the BBC to implement changes to the disadvantage of this place, or allow such changes to be accepted by default.

Mr. Tam Dalyell: I do not entirely share in the unanimity. I have known four Members of Parliament for Rotherham, every one of whom has made a contribution to the House. My hon. Friend the Member for Rotherham (Mr. MacShane) made an elegant and important contribution, and we are in his debt.
I do not always agree with my hon. Friend the Member for Walsall, North (Mr. Winnick) on every subject, but I strongly agree with what he said about public service obligations.
The discordant note that I introduce is this. We shall have to cast a particular mote out of our own eye. The problem is that it is all very well for the hon. Member for Macclesfield (Mr. Winterton) to say that, in the past quarter of a century, serious coverage has been reduced, but something else has been reduced: ministerial interest, in both parties, in the proceedings of the House of Commons. I am concerned about the gradual bypassing of Parliament, which I think started with Mrs. Thatcher. More and more, statements are being made in Millbank or in Conservative central office, long before they are made on the Floor of the House. It is a question not only of etiquette but of the amount of attention, particularly of Ministers, that is paid to the House of Commons.
Yesterday morning, there was a major event in the history of the Labour Government. I am not concerned here about the merits or demerits of the minimum wage legislation, but it is something that was very close to the heartstrings of my party. I shall put it gently. If such a measure had been passed after an all-night sitting, and if their colleagues had been up all night getting it through, Harold Wilson and Jim Callaghan would have made it their absolute business to be on the Treasury Bench at least for the final speeches, and probably—certainly in Wilson's and Callaghan's case—for all the speeches on Third Reading.
For much of the legislation that has been passed in the past few months—it was the same during the Conservative Government—the Secretaries of State whose legislation it was were very seldom to be seen on the Treasury Bench. They left it to junior Ministers. What more important thing do Secretaries of State who are conducting legislation through the House have to do than to listen—on their own legislation, which they are promoting—to their parliamentary colleagues of all parties?
If the Government cease to listen to the House of Commons—as Governments in general are ceasing to do—what do we say to BBC senior executives, one of whom, who must be nameless, has asked, "If you do not take yourselves that seriously, and if Ministers do not take

the House of Commons that seriously, why should the BBC take you so seriously?"? The debate is part of a wider argument on the bypassing of Parliament.

Mr. Tyler: I am grateful to the hon. Gentleman, and entirely agree with the important point that he is making so strongly. However, I think that he will agree that two wrongs do not make a right, and that it is not entirely clear which is cause and which is effect. I think that one of the reasons why successive senior Ministers, and Governments generally, have treated the House with less courtesy and respect for its role is that they do not think that they will attract the media's attention if they do so. We witness today an empty Press Gallery for this debate. I think that the hon. Gentleman will agree also that the media are not excused in paying increasingly less attention to the proceedings of the House simply because Ministers have followed them in making that mistake.

Mr. Dalyell: The hon. Gentleman has made the point more eloquently than I would have done. Others wish to speak. I shall only endorse what he has so pointedly said.

Mr. Alan Clark: I congratulate the hon. Member for Rotherham (Mr. MacShane) on making his case, and also on the restraint, in several senses, that he showed in developing that case. Specifically, he made no reference—he might have some acquaintance with or memory of them—to the complexities and, in a literary sense, corruptions of the career structure inside that enormous and—as he eloquently described it—rubbery corporation. He did not mention the pressures that those pressures generate, or the contribution that they make to an anonymity of responsibility, which makes it difficult to fix on a particular target or individual and to say, "If we can bring our case to them, perhaps we can correct this."
Meanwhile, as hon. Members have already said, we are witnessing the standard corporation technique, whereby, if one wants to get rid of a product, one makes very little of it. As supply is so limited that people cannot get the product, one says that there is no demand for it. It is a cyclical process. The BBC is engaged in that process, transferring programmes that it admits have higher ratings to "listening ghettos"—where no one can get at the programmes, or where one can hear them only with great difficulty, because they are broadcast at the wrong time of day. The process is self-fulfilling, and enables the BBC to say, "There is no demand for those programmes, so we may as well get rid of them."
The process is part of a larger one that I see developing within the BBC. It is a type of dumbing down. The BBC is giving much more air time and exposure to special interest lobbies and mini-focus groups that argue their case, although almost in political isolation, because they are not really politicians. They do not understand—as we do, as we are sent to the House by our constituents—political pressures in the round, although they have good soundbites, mini-rows and disturbances, and give trouble. However, those groups should be only on the fringe of politics, not at the centre, as the House certainly should be.
As the hon. Member for Linlithgow (Mr. Dalyell) so eloquently said, for a variety of reasons, the House finds itself under pressure from many different sectors. In the


eyes of many, our importance is diminishing. Therefore, rather than pay attention to what the House of Commons says, it is legitimate to listen to those various little focus groups, pressure groups and people who will make a scene on air or on television and give the programme "more of a kick".
I should like briefly to deal with the matter of that "kick"—the matter of ratings. It is no business of the BBC to determine its output by ratings—which are not and never have been part of its charter. I went to a lunch hosted by Sir Christopher Bland—I hope that I am not abusing his hospitality. He invited some prominent parliamentarians, and gave us a résumé of his future programmes and of what the corporation was doing. On all the items that he showed us, he declaimed their ratings and the acclaim from critics. He told us that the ratings for this or that programme were as good as those for ITV's programmes. That is not his business. Lord Reith never concerned himself with a programme's ratings. His duty, as he saw it, was to inform and to educate. That is how the BBC was conceived.
We can complain about the process, and we have right to do so, because it is deplorable. I know from my own mailbag that many individual constituents complain about it. The process can be corrected only by a strong and forceful personality who is not concerned with ingratiating himself with the establishment. The BBC requires an individual who will promote his various officials, editors and producers not on the basis of their impact on ratings or the acclaim that they garner, but on the basis of how they fulfil the BBC's fundamental duty, which is quite different from that of independent television companies—which have no duty except to their shareholders, and only minimal constraints imposed on them by censorship and the dictates of so-called good taste.
We shall have to initiate a fundamental change in the BBC—in attitude, conscience, responsibility and the sense of duty of those at the top. Until we do that, we shall have debates such as this one. The Press Gallery will remain empty, and no one will pay the slightest attention.

Mr. Richard Allan: I am grateful to the hon. Member for Rotherham (Mr. MacShane) for giving me a chance to raise the issue of regional television broadcasting of parliamentary affairs.
Many of us will have built up a quite close relationship with our regional BBC outlets and participate frequently in their programmes. It seems to me that there are two essential components in that regional broadcasting: first, that there are correspondents who go out of their way to build links with all the region's Members of Parliament, irrespective of party and position; and, secondly, that they are given adequate air time and are able not only to provide pieces for regional magazine programmes that follow the news, but to have their own slots throughout the week to broadcast genuine regional coverage.
That is especially important in areas such as Yorkshire—an area of interest both to myself and to the hon. Member for Rotherham. That we have a Leeds-based team is very significant: it is important that our coverage of Westminster comes from "John Turnbull, our man in Westminster", not from a national feed, and gives a genuinely regional perspective. People in Yorkshire and

other peripheral regions respect that. The breadth of coverage is significant, as those in the team are able to move into the wider arena: for example, we have recently discussed issues such as the Child Support Agency and alternatives to prison sentences—broader issues, discussion of which involves residents of the region and their parliamentarians. I ask myself where else we could get that sort of coverage.
Hon. Members have recently waxed lyrical about the importance of the constituency link as we discuss alternatives to the present electoral system. If we are not to have regional coverage, all we shall be left with is the Government's pronouncements and national spokespeople talking; people will never hear what their region's Members of Parliament think from a regional perspective.
The other key issue is the following of political careers. In Yorkshire, we report the Leader of the Opposition as the right hon. Member for Richmond, Yorks (Mr. Hague). We have followed the career of the right hon. Member for Sheffield, Brightside (Mr. Blunkett), who is reported as such, all the way from local councillor to his current position as the esteemed Secretary of State for Education and Employment. It is that ability to engage with local politicians as local characters that is important, in that it cuts behind some of the hype and spin that are often seen here.
I hope that, as well as debating the topical issue of "Yesterday in Parliament", we shall seriously look at the future of regional broadcasting. We should treasure it and continue to provide to people in the regions a genuinely regional voice, instead of their having to rely solely on Government pronouncements and national spokespersons' responses.

Mr. Roger Gale: I apologise to you, Mr. Deputy Speaker, and to the hon. Member for Rotherham (Mr. MacShane) for the fact that I was unable to be here for the first part of the debate. The hon. Gentleman knows, because he was in the same Committee earlier this morning, that I have been chairing the Committee on the Public Interest Disclosure Bill and was therefore unable to be here earlier. I hope that the House will accept my apology.
Despite having heard only part of the debate, I should like to make a couple of comments on the remarks made. It has been suggested that the BBC is in danger of sidelining Parliament into ghettos and, by that means, demonstrating that no one is listening, thereby putting itself in a position of being able to kill off the programme. Some of that is going on: I, like my hon. Friend the Member for Macclesfield (Mr. Winterton), heard Mr. Bannister last night indicate that "The Week in Westminster" was to be moved from its current Saturday morning slot to an hour on Thursday evening when, quite clearly, fewer people will listen. I regard that with sadness, because the breadth of Saturday morning programming means that people who ordinarily would not listen to "The Week in Westminster" might catch some of it and learn something that they might otherwise not have learnt.

Mr. MacShane: Is the hon. Gentleman aware that the audience for "The Week in Westminster" on Saturday is greater at its end than at its beginning? Believe it or not, it is actually an audience grabber.

Mr. Gale: I understand what the hon. Gentleman is saying, although there are those who are unkind enough to say that that is because people are tuning in for the programme that follows "The Week in Westminster", rather than for "The Week in Westminster" itself.
Be that as it may, that argument fits uneasily with that advanced by my right hon. Friend the Member for Kensington and Chelsea (Mr. Clark), who suggested that the BBC should not have to search for an audience. That is an elitist argument, which we have heard long and often. My right hon. Friend said that what is happening would not have happened in Lord Reith's day, but I hope that he will forgive me for pointing out that Lord Reith and his corporation did not face the competition in terms of outlets that faces the BBC today.
There are a dozen and more radio and television channels nationally, plus very good local radio channels and information available on the internet. Mr. Bannister told us last night that he was having great difficulty in persuading children to listen to the sort of programmes that the BBC puts on in the evenings, because young people have access to so many alternative information outlets. It is not surprising that the BBC has to consider whether anyone at all is listening to what it broadcasts. I suspect that, if not my right hon. Friend, then others would say in fairly short order, "Hang on—why are we paying our licence fee? Nobody is listening." I am not suggesting for one moment that the BBC should be populist, but I do believe that it has a duty incumbent on it to be popular and to present a breadth of programmes that attract an audience. Otherwise, as a broadcaster, I would have to say that there is no point in broadcasting.

Mr. Alan Clark: My hon. Friend's remarks are making me extremely concerned. His argument is essentially populist. There is strong competition to supply what it is thought people want and to titivate them and attract their attention by various means. However, the business of the BBC has always been to present the truth, the facts and objective commentary—to inform and to educate. It is a fact of life that that does not attract big audiences, but the BBC has to lump it.

Mr. Gale: On the contrary, the BBC over the years and currently does, on occasion, attract very large audiences, and all power to it for doing so.
I do not want to take much more time, but I want to comment on what Mr. Bannister said, because his views have been, not misrepresented, but partly represented this morning and I should like to present an alternative view. Matthew Bannister told Members of Parliament last night that the BBC was in fact extending the hours of coverage of Parliament. My hon. Friend the Member for Macclesfield recognised that fact in his speech, but what he did not say was that Mr. Bannister has also given a clear undertaking that, as and when—it would be sooner rather than later—digital sound broadcasting becomes widely available, instead of being available to an elite few who are able to afford expensive receivers, the BBC expects to be able to dedicate an entire channel to the broadcasting of Parliament. That seems highly desirable.
My hon. Friend the Member for Macclesfield said that Radio 4 on long wave was hard to receive, but I have to say that I listen to Radio 4 on long wave, not on FM, and I have no difficulty with it at all.

Mr. Ben Bradshaw: I am glad that the hon. Gentleman has pointed out that the proposals represent a

huge expansion of parliamentary coverage, which builds on the large expansion in recent years. That contrasts with the attitude of newspapers and other media, which tend to ignore Parliament. Does the hon. Gentleman agree that it is up to schedulers, not politicians, to schedule programmes on the BBC? Does he accept the point made by my hon. Friend the Member for Linlithgow (Mr. Dalyell), that part of the problem is us: we are boring and announcements are made on the "Today" programme and "The World at One", not in this place?

Mr. Gale: I was coming to that point, and I am grateful to the hon. Gentleman for making it for me.
Radio 5 Live is an excellent service: it comes to the House and covers live Prime Minister's Question Time; in addition, when Ministers are good enough to come to the House to make the occasional statement, it covers those as well. Radio 5 Live covers in a very good form a great deal of current affairs, news and politics throughout the evening. Radio 4 currently provides excellent coverage, and it is clear that that will be extended.
The hon. Member for Exeter (Mr. Bradshaw) is absolutely right, as is the hon. Member for Linlithgow (Mr. Dalyell), to lay the blame fairly and squarely in this Chamber. For this debate, there are more people in the Public Gallery than there are in the Chamber—there are about 13 Members of Parliament present. We are all aware of the pressures on Members' time resulting from constituency work or Committee work—I myself was guilty of that earlier this morning. It is not necessarily a fault that the fulcrum of debate has shifted from the Chamber of the House of Commons to other places, including the media, but we cannot blame the BBC for that.
Although critical of some aspects of Mr. Bannister's proposals, I broadly support them and I wish him well. I want to hear the extended coverage, because I believe that the BBC does a very good job.

Mr. Richard Spring: It is right that we should be having this debate about the future of the BBC's parliamentary broadcasting, not just because it is a subject of close interest to Members of Parliament but because the broadcasting of the proceedings of Parliament to the public plays an essential part in our democratic process. I congratulate the hon. Member for Rotherham (Mr. MacShane) on securing the debate and making his case so cogently. I also congratulate the other right hon. and hon. Members who have contributed.
The BBC is so well established; also it is not just a British institution. I share the high esteem and affection in which it is held. It has brought the most important events of the century into the homes and lives of millions of people. Highly professional BBC commentators and interviewers have become household names. The BBC also performs an invaluable function through its regional broadcast services, strengthening the identity of communities and highlighting issues of local interest.
More recently, the BBC began to broadcast the proceedings of both Houses of Parliament, providing a direct link between the people and their representatives. There is no filter, no comment and no spin. Politicians are shown not as they might wish to present themselves to television and radio presenters and the public, but as they


make their arguments and are held to account by their political opponents. Parliament is the heart of our democracy. Coverage of it is an unparalleled insight into how our democracy works.
The BBC is subject to pressure for change in the same way as other institutions. It has to adapt to changes in contemporary society. Not all such pressures are necessarily for the good or are likely to endure. In succumbing to them, the BBC may risk its unique relationship with Parliament and do a disservice to the democratic process.
The emergence of rich, vocal and powerful single-issue pressure groups as a major influence is one of the most significant changes in our national life in recent years. Campaigners have discovered that they can be more influential in impacting political decisions from outside the party political process than from within it. In Parliament, competing claims are balanced by Government and Opposition in the knowledge that both will eventually be held to account for their actions by the electorate. Outside Parliament, there is no counterweight to the shrill claims of single-issue groups. One example of how a decision on a serious issue can be derailed by a pressure group was the Brent Spar episode. Ironically, the ultimate effect was the reverse of minimising the environmental impact. The biggest challenge for the BBC and the other media is how to deal with the influence of pressure groups in their political coverage.
The growing importance of the media in political debate in recent years has led to the professional packaging of political arguments for the media as almost an art form. The soundbite culture has emerged. The tendency for Government policy announcements to be made outside the House of Commons, whether in exclusive press briefings or amid the razzmatazz of press launches, has undoubtedly reduced the accountability of the Government and the scrutiny that their policies receive. That practice has grown over the years, but it has mushroomed recently.
More seriously, Madam Speaker has repeatedly criticised Ministers for making announcements about Government policies outside the House. Regrettably, the desire to control the news has resulted in an incessant drip feed of headline-grabbing stories that often damage the credibility of the Minister, the Department or the project involved.
The BBC is caught between the need to preserve and enhance its audience figures and its overriding duty as a public service organisation. In the age of the soundbite and instant response, there is not the time for broadcasters to give the detailed consideration to political issues that Parliament can. Broadcasters are not in a position to demand information of the Government as Parliament does.
We live in an era of unprecedented news management. Perhaps it was ever thus, but the practice has latterly scaled new heights. The Prime Minister's press secretary recently complained that the BBC has become a
downmarket, dumbed-down, over-staffed, over-bureaucratic, ridiculous organisation.
Indeed. Governments can be tempted to avoid public accountability, but Oppositions have a duty to hold them to account. The BBC has a public service duty to assist that scrutiny fairly and openly.
Alastair Campbell's comments were greeted with dismay. However, commentators missed the point. As a professional news manager, he wants nothing more than dumbed-down, downmarket coverage. The raison d'être of his ilk is to replace substance with spin.
All Governments have sought to manage the way in which their policies are reported in the news media, but, by any objective standards, this Government have gone to extraordinary lengths to present themselves in a favourable light. That is why it is vital that Parliament should continue to be able to hold the Government to account and that the public should know about it.
The specific changes proposed by the BBC are not acceptable or appropriate. The number of long wave listeners is in decline. The BBC's audience figures for the two key programmes—"Yesterday in Parliament" and "Today in Parliament"—do not bear close scrutiny. We have all taken on board the comments of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) and my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) about the removal of "In Committee".
We are told that the public find our proceedings boring. That does not absolve the BBC from its duty to present our proceedings to the public as they are. It is not their duty to make Parliament more entertaining by jazzing up their coverage or concentrating on the more trivial exchanges.
Increasing coverage by an average of eight minutes a day is no compensation for switching Parliament to the wavelength with a declining audience. I do not accept that the format of "Yesterday in Parliament" is what makes people tune out or switch off when it begins. Let me be clear: the Opposition oppose the proposed changes. I should be grateful for an unequivocal statement of the Government's position from the Minister.
Over the years, Parliament has sought to protect the finances, integrity and independence of the BBC. I was among the many Members of Parliament on both sides of the House who sought to prevent cuts to the World Service budget. The importance of the BBC is its unique status as a public service broadcaster funded by the licence fee. That funding arrangement frees it from the financial pressures that beset purely commercial broadcasters. With that comes a special obligation to pursue the highest standards of broadcasting and reporting.
Just as Parliament has a duty to the BBC, the BBC has a duty to inform the public about the role of Parliament, including those aspects of Parliament that, while not dramatic, are an essential part of the democratic process. We believe that the proposed changes undermine that public responsibility. I hope that the BBC will accept its duty and urgently think again about the changes that it is proposing.

The Minister for Arts (Mr. Mark Fisher): I congratulate my hon. Friend the Member for Rotherham (Mr. MacShane) on securing the debate and introducing it with such clarity and force. The subject has been of considerable concern to the House since the BBC announced its proposed changes last July: there have been many written and oral questions Madam Speaker has corresponded at considerable length with the chairman of


the BBC; my hon. Friend the Member for Walsall, North (Mr. Winnick) secured an Adjournment debate on the subject last December; and the Select Committee on Culture, Media and Sport took evidence on 24 February. It is clear from all that that Parliament is exercised. As the hon. Member for Macclesfield (Mr. Winterton) has noted, it is nearly unanimous in its view today.
We have had an excellent debate. There has been general agreement about the excellence of the BBC's political journalism. It is because of that excellence and the proper rigour of scrutiny that that coverage puts on the Government and the work of the House that hon. Members are concerned about possible damage to its quality or effective reach. Two basic questions have run through the debate: what precise effect will the changes have; and, will they be consistent with the obligation placed on the BBC in its 1948 royal charter and agreement to
transmit an impartial account, day by day, prepared by professional reporters, of the proceedings in both Houses of Parliament"?
Decisions about programme content and scheduling that express that obligation are, as my hon. Friend the Member for Exeter (Mr. Bradshaw) said, wholly a matter for the BBC, which has and must have complete editorial independence, but the fulfilment of that obligation is important. Its purpose is not in doubt: to allow the public to hear the work of the House and to draw their own conclusions.

Mr. MacShane: Some people have commented on the lack of hon. Members present. Is my hon. Friend aware that no fewer than 12 Standing and Select Committees are at work this morning, with up to 20 hon. Members in each? Is he also aware that the parliamentary Labour party is meeting at the moment, attended by between 40 and 150 Members? The absence of hon. Members in the Chamber does not mean that this House and MPs are not at work. To deny that work to listeners of "Today" will be a serious diminution of the reporting of the House.

Mr. Fisher: I am grateful to my hon. Friend for making that important point. The right hon. Member for Haltemprice and Howden (Mr. Davis), the Chairman of the Public Accounts Committee, and my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the former PAC Chairman, made that point in their very important speeches. I am glad that the right hon. Gentleman has returned to the Chamber. His speech reflected exactly the importance of Committee work.
Let us be clear about what the changes consist of. "Yesterday in Parliament" is to be broadcast for 23 minutes instead of the current 14 minutes, but it will be broadcast only on long wave. "Today in Parliament" is to be extended on Fridays by 15 minutes to include coverage of Select Committees, but will also be broadcast only on long wave. A new Sunday evening programme, "The Westminster Hour" is to replace "In Committee", to which we will come in a moment. As hon. Members have pointed out, the new programme will, rather bizarrely, run throughout the year and therefore during weeks in which the House will not be sitting.
There will be a new nightly television programme covering Parliament, a new parliamentary web site as part of the BBC's News Online, and "The Week in

Westminster" is to move from 11 am on Saturdays to 8.30 pm on Thursdays—a slot devoted to Parliament and politics all the year round. Again, the same point about the sittings of the House applies.
The BBC claims that the proposed changes represent a net gain in parliamentary coverage. Overall, there will be an additional 55 hours of parliamentary and Westminster-related programming a year on radio and an additional 24 hours a year on television. However, much of that radio coverage will be on long wave.
Arguments expressed in the debate have tested the effect of the new schedule. Will there be a net loss of listeners in the shift to long wave? The answer is clearly yes. On the BBC's own projections, the audience for "Yesterday in Parliament" is likely to fall from 1.3 million to 700,000, so a 50 per cent. increase in programme time will be offset by a near 50 per cent. fall in audience.
The move of "The Week in Westminster" from Saturdays, following Ned Sherrin's "Loose Ends", to 8.30 pm on Thursday evening, is likely to produce a fall in audience from 732,000 to—probably—nearer 300,000. As hon. Members have made clear, that is a particularly strange change as the week ends on Thursday evening for very few of us, especially not in the House. As much as hon. Members like getting away quite early on Thursday evenings, the House has been sitting and working hard until late on Thursday evenings—and last week one of the most significant debates of the year, which reflected the concern of people who live in the countryside and touched many people, occurred on a Friday. It would have been missed by the new programme on Thursday evening. The answer to the question about loss of listeners is therefore clear.
Will the quality fall? The right hon. Member for Haltemprice and Howden and my right hon. Friend the Member for Ashton-under-Lyne made important points about the loss of "In Committee". Although the multi-item, magazine format programme, "The Westminster Hour" will run for 50 minutes—instead of the 30-minute "In Committee"—will that compensate for hard, detailed reporting of Committees? It is not comment on that work that the public ought to have the opportunity to hear; the question is how the PAC and other Select Committees are scrutinising the work of government. That is why Select Committees were set up in the first place.

Mr. Tyler: The Minister has already referred to the curious fact that some of the programmes will be broadcast when Parliament is not sitting. Have the governors and the chairman of the BBC given Ministers any indication of exactly what reportage they intend to include in "The Westminster Hour"? Will not it simply be speculative comment?

Mr. Fisher: They have not done so yet; that remains to be seen. As hon. Members have said, it is likely that the programme will talk about politics generally—perhaps the work of Whitehall particularly. Although such general political comment is important all 52 weeks of the year, it is rather different from the BBC's charter obligation to cover the House day by day.

Mr. Gale: Unless broadcasters provide the dedicated channels for Committee work and proceedings on the Floor of the House that I and others have advocated for a


long time, there will be some selection. The Minister is being slightly churlish. If the programme continues when the House is not sitting, one of the criticisms—which we have all made—that an enormous amount of Committee and other work is never covered, may be addressed. There is no reason why, in hindsight, a look at some of the very important work in Select Committees and other Committees should not be taken. I would hope to hear and see such material used when the House is not sitting.

Mr. Fisher: The hon. Gentleman makes a point. In fact, although Select Committees do some work when the House is not sitting, they are notable for their work load during such times.

Mr. David Davis: I should make clear that, my concern is not for the PAC, which gets enormous coverage on a weekly basis, but for the sterling work done by other Select Committees, which is not often covered on any other medium but "In Committee" and will be lost in an hour-long, magazine format programme designed to cover something exciting rather than valuable.

Mr. Fisher: Behind all this there is a general concern about dumbing down. The hon. Member for North Thanet (Mr. Gale) made a good point about a dedicated programme, which would be possible now. Further opportunities will be possible once we have digital broadcasting. However, the problem of reach also applies to digital broadcasting. Is the charter obligation fulfilled by digital broadcasting to a very small audience, or are we talking about a more complicated matrix of reach and quality?
In some areas, reception on long wave, which is crucial to the changes is, according to the chairman of the BBC governors in a letter to Madam Speaker, "poor".

Additional medium wave transmitters are used in Northern Ireland, northern England, east Scotland, Devon and Cornwall.
Mr. Bannister, who has been referred to, believes that the package taken in the round will enhance coverage of the proceedings of Parliament. It is clear that the strategy does not commend itself to the Public Accounts Committee—its Chairman has expressed his view forcefully—Madam Speaker or the House.

Mr. Spring: In the remaining few seconds of the debate, will the Minister indicate clearly his view and what he will say on behalf of the Government and his Department in discussions with the BBC about the future broadcasting of proceedings of the House?

Mr. Fisher: I make it clear that the Government's proper concern is the fulfilment of the charter and the charter agreement, which is what we are debating today. It is a complicated matter and I shall turn to it precisely.
Do the changes satisfy the obligation in the charter and the agreement? Does the way in which the BBC has proposed the changes satisfy the obligation to be accountable to Parliament? The answer to the first question must be yes. The programmes fulfil the obligation to transmit an impartial account day by day—even If that account is consciously scheduled so as to attract a smaller audience. The wording of the charter is about whether there is reporting day by day; that obligation is fulfilled. However, it is a matter of the spirit as well as the letter of the agreement, and that is what we are debating today.
Tomorrow, Sir Christopher Bland will hear in person the views that have been expressed today. In the next two weeks, before the Radio Times schedule is printed for 6 April—when the new programming is due to commence—he will have the opportunity to listen to the clearly expressed views of Parliament.

Broadclyst New Town

Mrs. Angela Browning: My constituents who live in the district of East Devon have for some time faced the prospect of a new town being built immediately adjacent to the village of Broadclyst, which is quite close to the Exeter city boundary. When the Devon county structure plan first review deposit version was published in 1996, I sent—as the Member of Parliament representing the area—a written submission in response to that plan. In the main, I supported the views of East Devon district council. In my letter to the county environment director in December 1996, I said that my views reflected those of the district council in that I felt that a new town would be highly inappropriate, and I expressed some sympathy with the proposal for a limited village.
We all accept that there must be new housing—I do not approach the debate from the point of view that we do not need new housing. However, I hope that the debate will identify what is appropriate in terms of the number and location of houses. I said in my submission that the decision to build a new town in my constituency should be deferred for five years while a full audit of brown-field sites throughout the county of Devon was conducted. The term "brown-field sites"—which is common parlance these days—refers to disused land that was used for domestic or commercial purposes and can be recycled.
My view remained unchanged in September last year when the examination in public met at county hall for three weeks. I spent three days giving evidence to the public inquiry on behalf of my constituents about the overall number of new houses proposed in the county structure plan for Devon, and specifically about the proposed new town at Broadclyst. I repeated to the inquiry my request for a deferment of the decision to build the town until a full audit of brown-field sites throughout Devon was completed.
The inquiry heard evidence from many representatives, including some from the city of Exeter and from Torbay—I see that the hon. Members for Exeter (Mr. Bradshaw) and for Torbay (Mr. Sanders) are both in their places. Perhaps not surprisingly, the representatives of the two local authorities declared that they had virtually no brown-field sites within their boroughs and that there was no alternative but to begin to encroach on the green-field sites in my constituency.
We must address two key questions when identifying housing need in Devon. The first is the assessment of total future numbers. An imperfect science seems to determine how many houses will be needed well into the future—in this case, we are looking beyond 2011. The Liberal Democrat-controlled county council has used inward migration figures of 7,330 a year to support its claim. In fact, the average over the past seven years has been just 5,000 a year, so there is already a difference of opinion in anticipating housing need.
At the examination in public, all parties around the table spent a great deal of time examining changes in social patterns within the region and discussing why we now needed more, and a greater variety of, housing. The inquiry engaged in constructive discussion, but there is always a thorny issue. Devon is a popular part of the country, where I am fortunate to have lived for 30 years.

Other hon. Members will know Devon through their visits to that county. Devon is the sort of place where people from other parts of the country want to live. They often cannot fulfil that ambition until they retire, so Devon is known as a retirement area.
I do not wish the House to suppose for a moment that I am one of those who think that we should "keep those foreigners out" or that I am not receptive to the idea that others would like to enjoy the Devon life style. I do not want anyone to misinterpret the case that I am making. However, there is a difference between natural inward migration by people who choose to live in Devon and what I would describe as an out-and-out marketing campaign by those who have a vested interest in persuading people to move to Devon. As I said at the examination in public, I believe that such action distorts the figures.
The county believes that we must accommodate inward migration of 7,330 a year, but the historic figure is 5,000 a year. The difference equates to about 1,000 homes a year. If we apply the 5,000-a-year formula, we see that we would not need a new town in numerical terms—and certainly not one at Broadclyst. The second factor that comes into play is location. The East Devon district has no indigenous need for new housing on this scale. The location, which is adjacent to the Exeter city border, is an important reason why Broadclyst has been chosen: it is intended to accommodate the growth and overspill of the city of Exeter.
I have every sympathy with Exeter's need for housing. My constituency shares services and facilities supplied by Exeter, including the general hospital, and the city provides employment opportunities. We understand the importance of Exeter to our part of Devon. I am very fond of Exeter: both of my sons were born there, so what more can a mother say? I can pay no greater compliment to the city of Exeter. However, I do not believe that it is in the interests of my constituents in neighbouring East Devon to accommodate Exeter's problems on such a large scale. It is proposed that 3,000 homes be built in the new town to accommodate 8,000 people eventually.
The Liberal Democrat county council and the examination in public have ignored what local people want and the views that they reflect through me, their democratically elected representative. Before the examination in public response was published recently, I was advised by the county council that the lobby groups would not be pleased by the result of the inquiry. I was obliged to inform the council that I am the lobby group in my area, so I have no problem with the Council for the Protection of Rural England or any other lobby group approaching me and saying, "Look at this terrible result from the examination in public". I argued against the new town during that hearing, and I shall continue to lobby against it.
In the Western Morning News on Monday, deputy leader of the town council Rod Ruffle said:
The view that I and some others in the group take is that providing two new towns in East Devon and the South Hams"—
a second town is planned for Devon—
will create less damage to the countryside than expanding existing towns and villages.
Let us examine that claim. If he meant that the way forward was to expand on to green-field sites around and within existing towns and villages, he might have a point.


However, I and others have called for an independent audit of brown-field or recycled land to identify land suitable to accommodate new houses. If, at the end of such an audit, it was found that those sites would not accommodate a sufficient number, there might be a case for saying that we should consider having a bigger settlement. Areas of land in my constituency would then need to be considered, as would land in other constituencies.
However, that is not what has happened. At the EIP, we heard that Exeter city council had carried out an audit. Indeed, certain developers attended the EIP and said that they had also carried out an audit of brown-field sites. I am asking the Minister for an audit carried out, or certainly scrutinised, by a body that does not have a vested interest in the outcome. Clearly, if developers have their eye on a certain piece of land, they have everything to gain and nothing to lose by carrying out an audit that does not really reflect the full potential of brown-field sites elsewhere. I and many of my constituents are not convinced that a proper independent audit to determine potential brown-field sites has been carried out in Exeter or around it—certainly not in the county of Devon.
Surprisingly, and probably for the first time in my life, I found myself agreeing with the Deputy Prime Minister, when he said in a recent statement to the House:
In future, we shall expect each regional planning conference to make a proper assessment of land availability and set regional targets for the use of recycled land. That has never been done before. It is an important change.
When the right hon. Gentleman tells us at the Dispatch Box that that has never been done before and is an important change, it begs the question of what sort of audit was carried out in the evidence to the EIP last September at county hall, Exeter. I welcome that news from the Deputy Prime Minister. He continued:
it will sharpen the focus of policy and action on the ground",
and that is exactly what this debate is about. He went on to say:
Last week, I asked my Department to work with English Partnerships and local government to create a national database of land use, which will give local authorities reliable information on the amount of recycled land available for housing."—[Official Report, 23 February 1998; Vol. 306, c. 23.]
Clearly, since the Devon county structure plan was laid and we all took part in that examination in public in September, certain things have changed. In that spirit, I ask the Minister to intervene by giving me his support today for my original request. I am asking him to give guidance in cases such as that of Broadclyst, where we are caught between the devil and the deep blue sea. The county structure plan has been laid, we have had the examination in public and yet a useful policy is about to come forward that could affect the outcome. I repeat my request to the Minister to give guidance and to intervene, and to support what I asked for in 1996, which was a moratorium while the exercise is carried out. When we have examined fully exactly how much brown-field land there is in Devon and whether it is appropriate for the new housing need, a decision can be taken about whether to proceed with a new town.
Many people may think that no real decisions are taken until the democratic process—whereby all those different stages in the county structure plan invite people such as myself and others to participate, to make proposals

reflecting our local views and to explain what residents think—is completed. I will, therefore, now turn to the examination in public held at county hall last September. Just after the first deposit version of the county structure plan was laid, a company called Wilcon Homes—

Mr. Adrian Sanders: Surely the plan stems from a planning conference in 1992, when the Conservative party was in control of county hall as well as central Government. I agree with much of what the hon. Lady has said, but she is not going back far enough to find the origins of the plan. I hope that the Minister will impose certain duties on Devon to look at more brown-field sites, which could be done. However, the origins of the plan are not as recent as she is leading us to believe.

Mrs. Browning: I am about to read some correspondence from the previous Administration, as I took the matter up with them as well as making my representations to the Minister this morning.
As I was saying, in November 1996, Wilcon Homes put out literature and held a travelling road show to promote "Clyst Hayes". I had never heard of the place, but I have a leaflet here describing it and Clyst Hayes turns out to be the name that the developers had already given the new town. As is evident, this leaflet is not some cheap piece of literature—it is in full colour and glossy.
The road show went round many towns in east Devon, travelling as far away as Sidmouth and Axminster, which may not mean much to people here, but they are some little way from Broadclyst. Wilcon Homes asked people in neighbouring towns whether they wanted a new town at Broadclyst. Of course, they were told that without it, their own towns and villages would be developed further, so it is not surprising that they ticked the yes box in support. That was presented to the EIP as evidence of local support.
I wrote to the then Minister of State, Department of State for the Environment, who replied on 27 January 1997:
It would not normally be appropriate for detailed discussions about the merits of a particular site to take place at an examination in public. The need to respect local preferences means that specific proposals for new settlements should normally only be promoted through district wide local plans. If, following the examination,
which had yet to take place,
the new settlement strategy is retained
we are talking broad principles and not specifics—
then it would be for the East Devon District Council, as the local planning authority, to consider whether the location proposed by Wilcon Homes is acceptable.
However, the EIP was specific. The land in question—Clyst Hayes, the town named by the developers although they had not gone through the full democratic process—is mainly farm land and stretches from Broadclyst station to the A30, where it meets Exeter airport.

Mr. Ben Bradshaw: Is the hon. Lady aware that one of the farmers who could make much money out of this project is the chairman of one of her local parish councils and was a leading light on the recent Countryside march? Does she not think that a little hypocritical?

Mrs. Browning: I am aware, as I was about to get to that point in my speech, that Wilcon Homes had taken


options on the land some period beforehand and said so at the EIP. So the site was not being discussed in general terms. The EIP was site specific. In fact, it was so much so that technical experts were called to give evidence about the noise of ground testing aircraft engines as the proposed land runs up to the perimeter of Exeter airport, where some companies service engines. Exeter airport falls in my constituency, as the hon. Member for Exeter will know.
When it was revealed that the developers had already secured options on the land, as the hon. Member for Exeter said, and that the democratic process of the EIP was taking evidence from people whose businesses could affect the noise distraction for houses on a specific part of that land, I was extremely suspicious. What price democracy if democratically elected representatives such as myself take the trouble to go through the process of the county structure plan, make written submissions, consult constituents and give up three days in September to give evidence on their behalf, only to find that all that has gone on in the background?
The EIP found in favour of the new town—I was not terribly surprised. Moreover, it recommended that east Devon should accommodate 1,500 houses over and above those proposed in the structure plan. Frankly, I hold out little hope in either county hall or the results of the so-called democratic process of the county structure plan review.
Although I have written to the chief executive, again requesting that a moratorium be placed on the decision to build the new town, I would appreciate—especially in the light of the Government's recent announcement—the Minister's help and support, as I do not think that the democratic process has been properly observed. I believe that my constituents, particularly those who live in the Broadclyst area, deserve better.

The Minister for London and Construction (Mr. Nick Raynsford): I congratulate the hon. Member for Tiverton and Honiton (Mrs. Browning) on securing this Adjournment debate, as I know that she has maintained an interest in this subject for a considerable time—indeed, since Devon county council first proposed its strategy for two new communities to help to provide for the county's housing needs. I noted her comments on both her constituency and the adjacent town of Exeter, which I know well. I entirely endorse her view that it is an extremely attractive town—

Mr. Bradshaw: City.

Mr. Raynsford: It is an extremely attractive city—I am delighted that my hon. Friend the Member for Exeter (Mr. Bradshaw) is present for this debate.
The debate is very timely, following so closely the publication on 23 February of our paper, "Planning for the Communities of the Future", to which the hon. Lady referred. The paper sets out the results of our analysis of the system that we inherited for calculating and providing for the country's housing needs. It sets out our strategy for promoting more sustainable patterns of development and for encouraging urban renewal. We want to ensure

that, where development is needed outside or adjacent to urban areas, it is sustainable—it must be combined with an active approach to the protection of the countryside.
That differs from the previous system, which has been seen as top-down, inflexible and too rigidly wedded to the principle of predict and provide. Our proposals represent a sustainable, democratic and comprehensive approach to meeting the country's housing needs—which, as the hon. Lady rightly stressed, is an important issue—while respecting the need to protect the countryside.
On the specific subject raised by the hon. Lady, my understanding is that the only proposal currently in the public domain for a new community in east Devon relates to the county council's strategy that was set out in the structure plan. The local planning authority has, as yet, no firm proposal to build a new town at Broadclyst. East Devon district council has not yet progressed its local plan to a point at which specific sites have been identified to accommodate growth in the district to 2011. Moreover, to my knowledge, no application for planning permission to build a new town has yet been submitted to the local planning authority.
I am aware, however, that in 1996, shortly after the Devon structure plan was placed on deposit, Wilcon Homes identified an area of land between Broadclyst railway station and Exeter airport on which it suggested that it would be possible to locate a new settlement of some 3,000 houses to be known as Clyst Hayes. The hon. Lady referred to some of the publicity that was attached to those proposals.
A new community in east Devon is a key element of the county council's strategy for accommodating growth, but the structure plan contains no site-specific locations—indeed, that would not have been appropriate for such a document. All the parties involved in the structure plan process accept that the appropriate place to identify site-specific locations is the local plan, which is to be prepared by the district council.

Mrs. Browning: I hope that the Minister heard even a small portion of the discussions about the site at the EIP.

Mr. Raynsford: I assure the hon. Lady that I shall mention the EIP in a moment.
Proposal N2 of the structure plan states:
A new community should be provided for within East Devon District, within the Exeter Area of Economic Activity as shown on the Key Diagram. The new community should include provision for about 3,000 dwellings, associated employment land provision and a range of community and other associated facilities.
The proposal also sets out the general criteria to be met before the community could be permitted. Those criteria provide for the community to be located where it can, first, be assimilated into the landscape of the area; secondly, avoid as far as possible the use of significant areas of the best and most versatile agricultural land; thirdly, be related to, but separate from, existing settlements; fourthly, access the Exeter-Waterloo rail line by means of a new railway station; fifthly, be accessible to the high-quality road network and the local highway system; and, sixthly, be developed without adversely affecting the operation of Exeter airport—it should not be affected by unacceptable levels of aircraft noise.
The county proposed to provide in East Devon district some 9,700 new dwellings, of which some 3,500 should be in the main area of economic activity—about


5,600 new dwellings were proposed for Exeter. The Exeter main area of economic activity was identified by the county council as a key location for the future development of the county's economy, which was reflected in the provision for 9,100 dwellings in the area between 1995 and 2011.
The county considered that there was insufficient capacity in existing settlements to meet such provision. It found that expansion on the periphery of Exeter was severely restricted by topography, agricultural land and other physical constraints, that opportunities to expand other settlements in the area were limited, and that the scale of such expansion would in any case be such that the character and setting of an expanded settlement could not be retained.

Mr. Bradshaw: That is the problem—Exeter has expanded to its limits. It is surrounded by lovely green, rolling hills, and further expansion on the periphery would alter the character of the city out of all recognition.

Mr. Raynsford: I entirely accept my hon. Friend's point, which highlights the dilemma of trying to ensure that development pressures are accommodated in such a way as to respect the character of the area and the countryside, and to avoid creating an unnecessary urban sprawl that would damage people's enjoyment of the countryside.

Mrs. Browning: I cannot let the hon. Member for Exeter (Mr. Bradshaw) get away with his comment. Those lovely green, rolling hills on which his constituents look out are all mine.

Mr. Raynsford: I am delighted that there is unanimity across the Chamber on the attractiveness of the countryside in that area, which, as a regular visitor, I entirely endorse.
To meet the identified need, the county believed that a new community offered the only satisfactory and sustainable solution. To accommodate the proposed level of development for the Exeter area, it considered that the new community would need to provide for 3,000 dwellings and land for any associated employment. That provision was considered the minimum at which a new community could achieve some self-sufficiency and support an adequate range of local facilities and services.
The county accepted that new communities represented a major new approach to development in the county. It wanted sustainable development of the highest-quality design; an integrated transport system that would promote the use of modes of transport other than the private car; and development that would minimise not only the need to travel, but waste and pollution.
After the structure plan had been placed on deposit in November 1996, there was a six-week period for objections and representations to be submitted to the county council. A panel was appointed, led by an independent chairman, Professor Graham Shaylor, to conduct the examination in public to which the hon. Lady has referred. The EIP was held between 16 September and 9 October 1997. The panel submitted its report to the county council in January 1998—it was made public shortly afterwards.
A number of key issues were debated at the examination by selected participants with a range of interests—I know that the hon. Lady took a close interest in that process. Relevant discussions included the strategy, the countywide provision for housing and the distribution of development in the Exeter, east Devon and mid-Devon areas. In those discussions, the county council's proposals for the overall level and distribution of housing provision and the proposals for two new communities were debated in considerable depth.
Having heard all the representations to the EIP, the panel concluded that the overall housing provision for the county should be increased, in line with household projections, from 74,500 to 79,000, which was some 4,000 less than the figure that was given in the regional planning guidance for the south-west. The allocation for Exeter city was recommended to be increased by 800 to 6,400.
The panel felt that, in east Devon, there was sufficient scope for new development to be assimilated into the landscape and that the existence of a good road and rail infrastructure would help to ensure that new development was not entirely dependent on the private car. It therefore recommended that housing provision be increased by 1,500 to 11,200.
While the panel supported the concept of a new community east of Exeter, arguments about the specific location were not part of its brief. The panel felt strongly that the strategic importance of this area to the county as a whole, its benefits in locational and economic terms and the high level of unmet need in that part of the county should be considered.
The structure planning authority for Devon currently comprises the county council, along with Dartmoor and Exmoor national park authorities, and, with effect from 1 April, they will be joined by Plymouth and Torbay unitary authorities. Together, they will consider the additional information provided by the examination in public, along with the written objections and representations received, and decide whether a new community is the most sustainable solution to provide for the housing needs—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We now come to the next Adjournment debate.

Health Services (Birmingham)

1 pm

Mr. Richard Burden: I am grateful for the opportunity to raise with the House and with my hon. Friend the Minister important questions that face health services in England's second city. It is particularly appropriate that the debate takes place today, as Birmingham health authority is in the middle of a major review aimed at developing a strategic framework for health care in the city into the new millennium. In putting behind us the destructive, dog-eat-dog days of the internal market, the Government have urged health authorities to take on a strategic and visionary role. I welcome the fact that Birmingham health authority is attempting to do that and I emphasise the importance of a full partnership with the people of the city.
It is difficult to look to the future of health care in Birmingham when the legacy of the past hangs over us so much. In the last Parliament, I had several Adjournment debates on bungled reorganisations and financial scandals in the then South Birmingham health authority and West Midlands regional health authority. There were Public Accounts Committee reports on those authorities. My hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones) was also very vocal on the issue. A climate of mistrust remains about any proposals for change and for the future of health care in the city. I understand that. As well as addressing my hon. Friend the Minister today, I address people in Birmingham. The time has come to put that mistrust behind us.
The services offered by health service staff in Birmingham are nationally and, in many cases, internationally renowned. The work of Birmingham Children's hospital and of the burns unit at the University Hospital Birmingham NHS trust, and that hospital's work on cancer and renal disease, are all internationally renowned. The University Hospital Birmingham NHS trust, Birmingham Women's hospital, Birmingham Children's hospital, Birmingham Heartlands hospital, the City hospital, Royal Orthopaedic hospital and Good Hope hospital are internationally and nationally renowned, and that remained the case throughout the scandals. As far as the health authority is concerned, those days of financial scandals and deficits are over. It was painful, but the problems were faced and dealt with.
Now pioneering work is being done in Birmingham on the local commissioning that forms the cornerstone of the Government's policy and is a consistent theme running through the recent White Paper and the Green Paper. Birmingham health authority, in conjunction with the voluntary sector and the city council, has recently made a bid for a health action zone.
We are getting things together in Birmingham, but our needs are still acute. The care provided by staff is second to none, but all too often it takes place in buildings and surroundings barely fit for this century, let alone the next. The last hospital built in Birmingham was Queen Elizabeth hospital. People in Birmingham sometimes think that the name refers to the present Queen, but it does not. The hospital was built in 1938.
I crossed swords with the former regional health authority on several occasions over its bungled reorganisations, but one matter about which it was right was Birmingham's major capital investment needs.

It estimated that about £500 million of capital investment was needed in Birmingham's health infrastructure over 12 years. We have seen between £120 million and £130 million of that so far. We still have no news about the rest.
Let us take the example of breast cancer services at the University Hospital Birmingham NHS trust. The services are first class and Calman accredited. An integrated approach is taken to breast care. However, if a woman goes for a mammogram in a hut at Selly Oak hospital and there are more patients than chairs in that hut at any one time, there is nowhere for her even to sit down. That is not appropriate in this day and age. If she needs a biopsy, that will be done the same day and she will get the results the same day. That is great, but she will probably have to sit in a corridor at what may be the most stressful and distressing time of her life. If she then needs breast surgery, she will go Queen Elizabeth hospital. She will be treated on a ward where the staff are first class, but there are simply not enough toilets for the patients.
The £200 million that the Government have made available to improve breast care is welcome. It will significantly improve radiotherapy services in the city and at the trust, but there is still a massive job to be done to tackle problems such as those that I outlined. Breast care is just one example. Many other examples could be given.
We need new investment; of that there is no doubt. We need a major programme of building refurbishment and replacement in Birmingham's hospitals. The health authority has some ideas and others have come from many quarters. I ask my hon. Friend the Minister to speak to his right hon. and hon. Friends in the Government and recognise the real needs in Birmingham.
On the framework in which any future investment will take place, I understand that the private finance initiative remains the cornerstone of major capital investments under this Government. Under the previous Government, there was one major problem with the PFI. Whatever else could be said about it, it did not produce any hospitals. At least under the new Government it is working far better.
However, the PFI can be a straitjacket to investment. In meeting investment needs not only in Birmingham but elsewhere, my hon. Friend the Minister must ensure that the needs of the service and of patients are put first and the investment framework is built around it, rather than trying to shoe-horn the needs of patients and services into a given investment framework.
Not only hospital development is important to Birmingham's health services. One of the strengths of the local health authority's review is that it places hospital development in a context and reinforces and embodies the vision in the White Paper. Unless primary care works, the rest of the health service cannot work properly or effectively. Pioneering work has already been done in Birmingham in developing locality commissioning. A multi-fund has been set up. Fundholders got together, even under the previous Government, perhaps to the embarrassment of the Conservatives, to work co-operatively and pool their resources in the interests of patients.
The problems that we face are still huge. In Birmingham, life expectancy is below the national average. We have one of the highest perinatal mortality rates in the country. We have one of the highest proportions of babies of low birth weight. We are in the


worst quartile for coronary heart disease. Birmingham is the seventh most deprived health district in the country. Integrated primary care and anti-poverty strategies are therefore vital. That is why I welcome the White Paper, the Green Paper and the new deal. That is why it is so important that we have a national minimum wage to tackle poverty. However, if those policies are to work, we also need to tackle the problems of the infrastructure of primary care in our city.
In the next 10 years, between 35 and 40 per cent. of general practitioners who serve the most deprived areas of our city will retire. Unless we tackle that problem, we cannot develop the type of primary care that we need in our city. The health authority, GPs and other health professionals are adopting imaginative and innovative approaches to developing primary care, but they need support. They are getting that through the White Paper and the Green Paper, but they need infrastructure support and resources.
I shall deal briefly with the way in which resources are allocated in the health service and the problems that that creates for Birmingham. Sadly, the current resource allocation formula does not meet Birmingham's needs. As I said, the city suffers from multiple deprivation. The great flaw in the resource allocation formula is that age-related need is not related to deprivation in the city.
The formulas are rather complicated, but the effect is real enough. As we know from the days of the Black report onwards, if substantial parts of the population are poor, that means lower life expectancy: people die in greater numbers before they reach old age. The current allocation formula can mean that such a city gets relatively fewer resources, rather than more. The result is that in Birmingham the health service gets about £533 per resident, which is less than many other cities and less than Kensington and Chelsea, and Westminster.
Studies undertaken by Birmingham health authority show that if the age and deprivation measures were taken into account in the same formula, the city would get an extra £17 million in resources to support its health care.
I welcome the Government's approach to the national health service. We are putting the days of the internal market behind us. The Government have shown that we are prepared to put more resources into health care and to give the NHS the priority that it needs, which is especially appropriate this year, the 50th anniversary of the NHS.
In Birmingham there is a climate of mistrust and problems from the past, but we as a city must come to terms with them. We must come to an agreement about the kind of health care that we want and how to develop it. We are making a start and looking towards a primary care-led national health service, with clear pathways to quick diagnostic treatment where that is appropriate, and stays in hospital for the necessary time, without keeping people in hospital if that is not the most suitable place for them to be. The necessary support must be provided, whether through intermediate care or home support. Where medical conditions require specialised treatment, we have the people in Birmingham who can provide that in tertiary centres in our magnificent hospital services, but the buildings are not up to scratch.
We need to develop innovative plans to take those services into the next century. We are prepared to do that, but we need support from Government. I hope that my hon. Friend the Minister will study closely what is

happening to the health service in Birmingham. We welcome the reviews that are taking place, but we recognise that for those reviews to result in agreement among Birmingham people and to overcome the climate of suspicion that has lasted too long, the resources must be made available to ensure that we have the primary care networks that will be vital to health services in the future, and the investment in our hospital services that Birmingham needs.

Dr. Lynne Jones: My hon. Friend is right to refer to the climate of mistrust that has developed in Birmingham whenever we consider proposals for the reconfiguration of our health services. That is largely because people feel that change is finance driven to make savings and cut hospital resources. If we are to overcome that mistrust, it is essential that the health authority brings people along with its plans. Because of the perception that private finance is the only way to get capital resources into the health services, only schemes for which private finance is obtainable will be promoted, rather than schemes that are genuinely needed. That problem must be addressed if we are to get confidence in Birmingham—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The intervention is far too long.

Mr. Burden: My hon. Friend makes an important point. The debate around private finance will go on.
It is important for my hon. Friend the Minister to hear what I am about to say, and for it to be heard outside the Chamber. The climate of mistrust is understandable, as my hon. Friend and I have acknowledged. As the debate continues, people must listen to what is being said, whether by the health authority, the trusts or the other stakeholders, rather than the worst possible construction immediately being put on every document and submission. That results in trench warfare that sends all the wrong messages to Government and does not move the health debate forward in Birmingham.
My hon. Friend the Member for Selly Oak has adopted a highly constructive and positive view of health services in the city and has worked on that for a long time. My other hon. Friends in the Birmingham group of Labour Members have also done so. It is important that, as a city, we get ourselves together, work out what we want and go for it. If we do that, I am sure that we will get support from the Government.

The Parliamentary Under-Secretary of State for Health (Mr. Paul Boateng): I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) on securing time to debate this very important subject. In a health authority area that encompasses seven acute trusts, two community trusts and two mental health trusts, and spends over £500 million annually on health services, it is critical that the long-term strategy for those services is robust. My hon. Friend's interest in the matter and his contribution over a number of years enormously assist us in taking forward the health interests of Birmingham constructively, as does the involvement of several of my other hon. Friends from Birmingham in the debate.
It is important to note that the debate—the tenor of which we got this afternoon—and the discussion are far from over. The conclusion of Birmingham health authority's recent public consultation on 2 March was an important starting point in developing a long-term strategy. The term "starting point" is probably a misnomer, because, as my hon. Friend mentioned and as anyone who takes an interest in the matter will know, there is a lively history of such reviews in Birmingham.
We must make sure that we do not end up with a bungled or botched job. That characterised the activities of the previous Government in relation to the health service in Birmingham. We must move to a sustainable and sustaining settlement of the outstanding issues.
A previous plan developed in the late 1980s, entitled "Building a Healthy Birmingham", failed because of the sheer scale of the capital investment that was required and its tendency to exclude primary care. It required an investment of £550 million, mainly for acute services, and a significant increase in acute beds. The previous Government's obsession with the market, the introduction of capital charges and the way in which health care was developed meant that the scale of the investment required became unsustainable.
My hon. Friend graphically described the need to invest in Birmingham, not least in a respect dear to this Government—the importance of ensuring that we tackle the scourge of breast cancer in a way that does not add to the suffering and pressures of those experiencing this condition. There is a need for more investment and to take forward proposals capable of commanding the support of the entire community.
The debate in Birmingham is taking place against a background of what my hon. Friend described as mistrust and suspicion, but we must look at the positive aspects. The relocation of the cramped and rundown Birmingham Children's hospital to the site of the former Birmingham general hospital—which will be completed in May 1998, and forms an investment of some £30 million—is good news and will deliver health gains.
There have been achievements in terms of the reprovisioning of the existing single-specialty hospitals on to acute hospital sites, where they would have all the clinical and support service back-up needed for modern health care. This has taken place after public consultation and—excluding the Royal Orthopaedic hospital, where special considerations applied—has been achieved with success.
The newly merged health authority in Birmingham must ensure that momentum is not lost, and it will ensure that steady development, year on year, keeps pace with the changing NHS. Birmingham health authority held a series of stakeholder conferences in June and July last year, each one based in the catchment area of one of the cities for main acute trusts. The contribution from those conferences formed part of the strategic planning which culminated in the consultation document.
The document sets out a number of choices, each reflecting an aspect of health care and looking at the effects of social deprivation on health. My hon. Friend is right to draw attention to Birmingham's specific problems. We have seen a positive change in the

introduction of the needs element of the weighted capitation formula. Birmingham was the eighth highest gainer in the country and is now within 0.03 per cent. of its weighted capitation target.
My hon. Friend referred to the problems associated with providing high-quality primary care and the reliance on single GP practices and aging GPs, and the retirement which inevitably follows. Those will require careful managing. Inevitably, that must take place within the key principles laid down in the White Paper. The emphasis is very much on partnership.
The days in which the NHS was bedevilled by the obsession with competition and the market, which characterised the previous Government, are over. The emphasis in the new NHS is on co-operation and collaboration. That is good news. We want to maximise care for patients and shift the focus on to the quality of care, so that excellence is guaranteed to those patients.

Ms Gisela Stuart: Will the Minister take account of the lack of GP recruitment within Birmingham? Simply saying that that "needs careful management" may not be adequate, given the tremendous need in some parts of the city—particularly around the city hospital.

Mr. Boateng: My hon. Friend speaks with authority on these issues, and she is right to draw the attention of those with responsibility for recruitment in Birmingham to the need to ensure that the requirements she has highlighted are taken on board.
In responding to the needs of the times, we must look at a number of models for primary care and the possible creation of ambulatory care and diagnostic centres. We must examine acute assessment, emergency admissions and intermediate care facilities for rehabilitation. The consultation document addresses those issues, which are important—particularly to the care of the elderly. We want to make sure that the lives of elderly people in Birmingham are improved in terms of their capacity to contribute actively to the community.

Dr. Lynne Jones: On rehabilitation services, there is a worry in Birmingham that the use of nursing homes and other facilities for care which was previously provided in hospital could lead us down a slippery slope towards charging. Will my hon. Friend assure us that the Government will reject that approach?

Mr. Boateng: I am anxious to make sure that we have a mixed market. We must recognise the contributions of the voluntary and private sectors, and we need to make sure that managers are innovative and prepared to look at new ways of delivering rehabilitation and recuperation. I strongly urge Birmingham health authority and the local authority to think boldly and imaginatively. They must work together to meet the needs of this vulnerable section of our society.
We have issued guidance to the health authorities as part and parcel of the White Paper principles and how we intend to implement our proposals. The integrated programme of action that we set out in "The New NHS" and those elements of the Green Paper "Our Healthier Nation" is where early progress needs to be made. That is the background against which decisions will be made about health care in Birmingham.
My hon. Friends will understand that it is not my place, or that of any other member of the ministerial team, to comment on the health authority's specific proposals. There may come a time when that is necessary, but it is not now. The Government expect all strategic plans to take forward the interest of patients and health and social care, and to take into account the principles outlined in the White Paper. We want to make sure that we work together in a way that puts the patient at the heart of all that we do. The primary care groups and their development are important, and we must make sure that the local authority and the health authority work ever closer together.
On a recent visit to Birmingham Heartlands, I was enormously impressed at the way in which the NHS and the local authority are working together, and the real contribution that is made by social workers and clinical professionals alike. It is in that spirit of co-operation and collaboration that we will best serve the interests of all the people of Birmingham.
I am grateful to hon. Members who have contributed to the debate, and to my hon. Friend the Member for Northfield for taking the lead in bringing this important matter to the attention of the House.

Animal Testing

Mr. Norman Baker: I welcome the fact that we are having the first debate this Session on the important matter of animal experimentation, which is of considerable importance to many people in this country and to many hon. Members from all parties. I hope that the hon. Member for Newport, West (Mr. Flynn) will catch your eye, Mr. Deputy Speaker, during the debate.
I have given notice to the Minister's office of one or two of the points that I intend to raise. I hope that he will find that helpful, and that it will mean that the debate is fuller than it might otherwise have been.
In the United Kingdom, 2.7 million Home Office-approved animal experiments are carried out each year. These are
likely to cause…pain, suffering, distress or lasting harm.
according to the "Statistics of Scientific Procedures on Living Animals". In addition, the Ministry of Defence conducts around 11,000 experiments a year, a figure which has almost trebled since 1992, when the present right hon. Member for Kensington and Chelsea (Mr. Clark) was Minister of State.

Mr. Alan Clark: I intervene to clarify for the record that it was after I had left the Ministry of Defence that the number of experiments trebled. As the hon. Gentleman put it, it might have sounded as though they increased during my period of tenure. While I was there, I did my level best to keep them to an absolute minimum.

Mr. Baker: I am grateful for that clarification. I was going to make the point that the number of experiments has risen—unduly, in my view—since the right hon. Gentleman left his post.
Can we as a human race feel comfortable that we are using animals in this way to such an extent; that we place them in unfamiliar surroundings and often subject them to painful and gruesome experiments? I intend to show that the experimentation carried out in this country is excessive, the results are unreliable, and that alternatives exist that have yet to be fully and properly exploited.
I welcome the Government's decision to end the testing of cosmetics products, but, in reality, it has made virtually no difference to the numbers, stopping only about 800 procedures out of 2.7 million. What is more, cosmetic ingredient testing has not been banned, and it accounts for most cosmetic testing on animals. Almost 2,000 cosmetic ingredient tests took place in 1996. A supplementary note from the Home Office, published in November last year, talked about cosmetic ingredient testing. I would welcome clarification from the Minister about whether the Government have reached a conclusion on that matter.
As all cosmetic products can be classified as vanity products, do the Government agree that a comprehensive ban on all cosmetic ingredient testing is essential?
Will the Government set a target to reduce the number of animal experiments that will be carried out during the lifetime of this Parliament, and give an absolute guarantee that fewer experiments will be carried out each year at the


end of it than at present? That commitment is terribly important, and I hope that the Minister will respond to it when he replies.
At a fundamental level, animal experimentation rests on a view of reality that sees living beings, in all their individuality and unpredictability, as a set of interchangeable and predictable machine parts. It examines one aspect of the body in isolation from the huge range of influences, both environmental and subjective, that affect it. It ignores the whole picture and focuses on a small detail.
That strictly limiting and short-sighted viewpoint seeks to justify the extrapolation of data from one species of animal to another. I question the very basis of the value of animal experimentation in certain circumstances. There are plenty of examples to show that the logic is fundamentally flawed. All animals are different. It is patently obvious that a mouse does not resemble a human; neither does a rat or a rabbit, yet all those animals are used in experiments, in the claim that they will benefit humans.
The fact is that all animals, including humans, react differently to different substances. They metabolise substances in different ways. They can tolerate different levels of any given substance. They obtain and need vitamins in different ways. They have different life cycles. They have different digestive and circulatory systems. Most important, all species suffer from different diseases. So how can we be sure that the experiments are reliable?
I give the Minister examples of where these experiments are unreliable: lemon juice kills cats; parsley kills parrots; penicillin kills guinea pigs; strychnine is harmless to monkeys, as is arsenic to sheep; insulin causes malfunctions in chickens, rabbits and mice; aspirin causes birth defects in monkeys; and thalidomide is safe to guinea pigs. The list is substantial and clearly demonstrates that we are foolish to rely on the reliability of animal experiments. What will the Minister do to tackle the uncertainty of the results of animal testing?
I deal now with some of the animal experiments that take place, and will look at the matter from not a human-centred but an animal-centred point of view. One of the common procedures is the LD50 test. Animals are dosed with various quantities of a substance to find out how much is needed to kill half the animals in a particular batch. The test is crude and unscientific, and causes immense suffering to animals, yet such tests have risen dramatically in recent years, to almost 200,000 in 1996.
The Government said in November that they would press for the LD50 test to be used only when "absolutely necessary". What does absolutely necessary mean? What steps is the Minister taking to eliminate that test? Why can he not simply ban it? When is it necessary? I am not convinced that it is at all necessary. The Animals (Scientific Procedures) Act 1986 requires animal suffering to be weighed against the benefit of the research before a licence is made. I suggest that, on that basis alone, the LD50 test should be banned.
Another common and particularly painful experiment is the Draize test, which is used to measure irritation. As the Minister will know, rabbits are often chosen for eye studies because they cannot blink. How appalling that animals that cannot blink are used to measure irritation in the eye. Guinea pigs are used for skin experiments. Other

tests are simply beyond belief. One has to ask what on earth is the motivation behind them. Rats are forced to breathe smoke bomb fumes to investigate the effects on the lung to see whether oxygen treatment is beneficial. It is beyond belief that such tests continue.
Animals suffer not only during the tests but before and after. I draw the Minister's attention to early-day motion 802, which I tabled, with other hon. Members who are present today, to draw attention to the fact that primates have been transported to this country from Indonesia and other places, with journeys lasting up to 58 hours, in small wooden crates in aeroplane holds. The animals suffer considerably before they even arrive in a laboratory. That early-day motion has been supported by 61 hon. Members from all parts of the House.
So what great human endeavour justifies the imposition of this suffering? Forty-nine per cent. of experiments are carried out for commercial gain, not for health purposes but to produce a washing-up liquid that is more competitive, or a "new improved" scourer, or a shoe polish that cleans more effectively. The other main source is university work, which accounts for a further 29 per cent. A great deal of university work is, of course, funded by commercial concerns. In other words, animals are being made to suffer purely to improve the financial profitability of private companies. That is totally unethical.
Furthermore, the drug industry's involvement cannot be overstated. The structure and context of medical research are such that its fundamental priority is to satisfy the pharmaceutical industry's thirst for profit, which is now the largest in the world. That is the motivation. It seems that, as far as the drugs companies are concerned, a pound of flesh equals a pound of profit.
Large numbers of experiments on animals, many of which are repetitive, are carried out to test weapons—experiments such as firing a bullet into the skull of a monkey or blasting body armour worn by a pig. I have already mentioned the near trebling of the number of experiments by the Ministry of Defence at Porton Down.
Here is another question for the Minister. Will the Government honour their pre-election pledge to forbid the use of animals in the developing and testing of weapons? I hope that he heard that question. It is most important, and it is a matter of ethics.
As I have said, we as a human race are foolish to trust the reliability of medical experiments on animals. I also want to draw attention to the fact that many of the experiments are geared towards the elite end of the market, designed to perfect expensive operations such as organ transplants, from which most of the world's population will never benefit.
Such experiments are for the benefit of a small minority, and do nothing for the basic human health of most people, either in this country or in the rest of the world. While we are busy experimenting and perfecting organ transplants, millions of people lack clean water, basic shelter and food. Perhaps we should devote more of our resources to those purposes.
The Animals (Scientific Procedures) Act 1986 has been subject to some review, but I am still concerned about the work load of the inspectors. In 1996, there were only 17 inspectors whose work load included monitoring 14,870 licence holders, granting 2,202 new licences,


assessing progress in 3,869 projects, assessing and approving 667 new projects and inspecting 300 establishments covering 2.7 million experiments.
It seems to me that we need a new super breed of inspector to carry out all those functions. If the 1986 Act, flawed as it is, is to work properly, we need to appoint more inspectors and ensure that they are given the proper resources.
To be fair, I must admit that the Government have recognised the problem. I believe that something is being put back into the budget.

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): indicated assent.

Mr. Baker: I welcome that; the cuts have not gone ahead. Credit where credit is due—but, even with that restoration, there will still be a great shortage of inspectors under the Act.
I have other concerns about the openness of the system, and I am unhappy that so much of the information on animal experiments is secret. We are not allowed to know details about the establishments and individuals licensed under the Act. The Government's commitment to freedom of information, which I greatly welcome, means that we should open up the process far more. How does the Minister intend to combine the freedom of information commitment with the secrecy inherent in the 1986 Act?
I must wind up my speech now, because the hon. Member for Newport, West (Mr. Flynn) and the right hon. Member for Kensington and Chelsea want to catch your eye, Mr. Deputy Speaker. They have cleared that with me, and have my permission to intervene in the debate.
We must aim for animals to be respected, with the legitimate rights to dignity and protection that we, as human beings, would expect. They have real feelings and can experience real pain. It is unethical for animals to be seen as a resource to be used as we please, and I await the day when all except the most essential experiments have been brought to an end. The Government should make a clear commitment to starting towards that aim now, by setting a target for reducing animal experiments.

Mr. Paul Flynn: rose—

Mr. Alan Clark: rose—

Mr. Deputy Speaker (Mr. Michael J. Martin): Is the Minister happy to allow the two other Members to be called?

Mr. George Howarth: indicated assent.

Mr. Paul Flynn: I congratulate the hon. Member for Lewes (Mr. Baker) on securing the debate and thank him for his generosity in allowing me to take part in it. I also congratulate him on his skilful and persistent use of parliamentary questions to reveal much new knowledge about the secretive business of animal experiments, especially those taking place at Porton Down.
I, too, exonerate the right hon. Member for Kensington and Chelsea (Mr. Clark) as regards any suggestion that I might have made that he could have been responsible for any increase in experiments. Indeed, as I understand the figures, he was entirely responsible for a decrease in the number of experiments during his period in office, when he had some influence over such matters.
As someone who worked in laboratories all my life until I entered Parliament, I emphasise that animal experiments are poor science; they are unreliable and ineffective. I agree with every word that the hon. Member for Lewes said, and I advise those who claim that animal experiments give reliable results to consider any one of dozens of cases that I could cite.
I could mention Eralden, Opren and other drugs, but it was thalidomide which caused one of the most painful experiences that we have had with a chemical drug. Thalidomide came on the market having been tested not only on many other animals but on rabbits, which are regarded as being more sensitive, and even on pregnant rabbits, with no sign of difficulty. Only when, after the terrible deformities occurred in human babies, the scientists went back and tried the drug on another breed of rabbit did they reproduce the fault. It is nonsense to believe that there is any kind of exact science involved in that. Far more reliable alternatives already exist. There are simulations and the use of tissue outside the body, both of which are far better science.
We all agree that those experiments represent the abuse of animals on a scale that dwarfs all the other animal abuse about which we get so excited. We have no right to conduct them. It is true that a tiny number of experiments can be defended, but that is all. The scale on which experiments are practised, mostly for commercial purposes, cannot be defended.
As an intelligent species, we stand accused of using defenceless animals as though they were inert chemicals with no feelings. We have no right to do that, and I hope that the Government will hear the debate and there will be a practical and swift response.

Mr. Alan Clark: I join in the tributes to the hon. Member for Lewes (Mr. Baker), who has a good record on this topic. I always listen to the hon. Member for Newport, West (Mr. Flynn) with interest and enjoy his contributions, even when they relate to subjects that we are not allowed to talk about or expand on in the Chamber. I was interested to hear that his comments today were founded on personal and scientific experience, and they are all the more valuable on that account.
I have two questions to ask the Minister. The first is about the so-called commercial confidentiality, which was raised by the hon. Member for Lewes, and which involves tremendous and horrendous repetition of experiments. There should be some way of ensuring that a particular experiment occurs only once, and the results are then put into a pool from which anyone can draw by paying a fee—preferably to a Government agency to fund more inspectors. Results should not be kept private within whatever corporation funded the experiment, so that the experiment has to be repeated 10, 20, 30 or 100 times to produce the same result on 10, 20, 30 or 100 wretched animals to verify what may happen if an identical or a similar product is marketed.
My second point is about the conditions in which animals are kept. The hon. Member for Lewes talked about primates being brought here in crates in holds on 55-hour journeys, but many of the conditions in which animals are kept in laboratories are by no means perfect, either. Conditions are inhumane both before and after the experiments, when animals are usually simply destroyed.
A serious lack of humanity creeps into the treatment of animals the moment they are regarded as something for commercial and industrial exploitation. They lose their identity as living creatures. Surely this area should be better regulated?
The Minister and his party gave assurances in their election manifesto, which were greatly welcomed by many people in the electorate, including myself, that they would do something about the problem. I cast no aspersions on the way in which the Minister plays his part in the Department, but I know about the pressures that exist when one is behind a ministerial desk, and the way in which officials produce arguments along the lines of "On the one hand…on the other hand…but in conclusion, Minister, we really feel that…".
Those views are reproduced in documents, and I hope that the Minister will be strong enough to override them and discharge the obligation that his party undertook in its manifesto, which gained it many votes. I hope that, in the 12 minutes that remain, we shall not be treated to the Minister's simply reading out a brief composed by his officials to cover everybody's tracks and to explain that "There is really nothing much that can be done for a bit—because…"

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): That might have been the kind of response that the right hon. Member for Kensington and Chelsea (Mr. Clark) gave when he was a Minister, but I hope that I shall not fall into that trap.
I congratulate the hon. Member for Lewes (Mr. Baker) on his success in obtaining the debate. He has asked 27 written parliamentary questions this year alone on animal experimentation. I make no criticism of him for that; it is a measure of how assiduously he pursues his interest in the subject. My hon. Friend the Member for Newport, West (Mr. Flynn) is also a regular correspondent with my Department on the subject.
I am not entirely confident that, in the time available to me, I shall be able to cover all the points that have been made, so I issue a public invitation to the hon. Member for Lewes to come to the Home Office to discuss the issues that he has raised. My noble Friend the Under-Secretary of State, Lord Williams of Mostyn, and I would welcome such a meeting, and I hope that he will take up that invitation.
I acknowledge, as I am sure will the hon. Gentleman, that my noble Friend, who has prime responsibility for this area, has assiduously pursued the Government's agenda and we are making some progress. The hon. Gentleman was good enough to acknowledge that with regard to a couple of areas.
We seek to ensure that the highest possible standards of animal welfare are implemented and that animals are used in scientific procedures only where there is a clear justification for so doing.
We are promoting what the Department calls the three Rs—reducing the number of animals used, refining procedures to minimise suffering and, where possible, replacing animal use. In particular, with respect to primates, we are making progress on LD50 testing and cosmetic testing.
As the hon. Gentleman acknowledged, we have increased the budget that has been made available to the Animal Procedures Committee to develop alternatives to the use of animals from £182,000 to £259,000. In the greater scheme of things, that may not be an enormous sum of money, but it is a considerable increase in what was a quite small budget. It is fair that that should be acknowledged.
We also intend to pursue relevant measures throughout Europe rather than risk exporting animal experimentation to countries with less rigorous controls than ours. We must ensure that measures are sustainable and do not unnecessarily disadvantage United Kingdom research, medicine and industry or compromise public safety.
The hon. Gentleman acknowledged that we have secured an end to the testing of cosmetic products on animals and we are now exploring the possibility of extending that ban to the testing of cosmetic ingredients intended primarily for vanity products. No new licences to test cosmetic products or ingredients have been issued since May. Our legal advisers have cautioned the Secretary of State that he has no grounds, at this time, to revoke the existing licences.
No new licences to test tobacco or alcohol products have been issued since 1 May, and no new licences are in force which would allow such testing. On 6 November, we announced a ban on the testing of tobacco and alcohol products.
Three new inspectors have been recruited since June and further funding has been secured for a further three inspectors, bringing the complement to 21.
We have announced that some form of ethical review process will be required in all establishments from 1 April 1999.
The review of biotechnology and the patenting of animals is a matter primarily for the Department of Trade and Industry, but it follows such matters closely.
In addition to the pre-election pledges to which the right hon. Member for Kensington and Chelsea referred, we have also announced a ban on the use of great apes, that the use of ascitic animals in monoclonal antibody production will be phased out, and that the number of animal welfare experts on the Animal Procedures Committee will be increased. New appointments are expected shortly.
The hon. Member for Lewes asked about the transportation of live animals. We shall allow the catching of wild primates only if there is a specific and exceptional justification for so doing. Therefore, the onus is on proving that that is necessary. If shorter journey times are possible and animals can be flown directly to the UK, we would welcome that. As the hon. Gentleman will know, many airlines have already stopped such work as a result of public pressure.
The hon. Gentleman, like the right hon. Member for Kensington and Chelsea, referred to the commercial gain of companies engaged in such work. Some suggest that nearly 50 per cent. of experiments are carried out purely for commercial gain. Nearly 50 per cent. are carried out in commercial establishments, but, in many cases, company profitability is not the factor most often taken into account in making a cost-benefit assessment. Hon. Members will be aware that that process goes on. Many experiments carried out in commercial establishments are to meet the requirements of international regulators that products be proved safe for use, manufacture and distribution. Most commercial organisations exist to make a profit—they would not be developing new drugs or other products if they were not profitable—but that fact militates against the argument that such commercial undertakings are entirely profit driven.
With regard to cosmetic ingredient testing, the hon. Member for Lewes referred to previous undertakings. We are exploring the possibility of a ban on ingredient testing, on which I hope to be able to make an announcement in due course. That is a complex area, but one which we are taking forward.
We are considering whether section 24 of the Animals (Scientific Procedures) Act 1986 should be amended, but no decision has yet been made. We are pressing international regulators to dispense with the need of LD50 tests, but, at the moment, they are, more often than not, almost entirely the requirement of international regulators.

Mr. Alan Clark: rose—

Mr. Howarth: In view of the time, I shall not give way, but the right hon. Gentleman may wish to correspond with me.

Mr. Clark: Will the hon. Gentleman give way for just half a second?

Mr. Howarth: For half a second.

Mr. Clark: The hon. Gentleman said that the Government were considering the argument. Why cannot

the Minister share the arguments, pro and con, with the House? I should have thought that the whole matter could be settled in a matter of hours.

Mr. Howarth: I have only three minutes to respond to the points that have been made, and it would not be sensible for me to pursue all the arguments in the sort of detail that the right hon. Gentleman might like.
The number of procedures have been reducing steadily since the 1970s. However, in recent years the use of transgenic animals has put pressure on the total number. Transgenic animals allow new lines of important research to be followed. We are aware of the target set in the fifth European environmental action plan to reduce the number of animals used by 50 per cent. by 2000. We have made considerable progress in reducing the number of animals used over the years.
In only 10 months, my noble Friend the Under-Secretary has set out on an ambitious and, I think most people would accept, caring agenda. I hope that hon. Members will agree that a great deal has already been achieved and, characteristically, my noble Friend has done that in a thoughtful but usually effective manner.

Mr. Baker: May I ask the Minister a question?

Mr. Howarth: I have one minute left and it would be impossible.
There is more to do, but I am confident that we shall continue, as we have begun, to deliver positive improvements to the supervision and regulation of animal welfare. I assure the House that we take that commitment seriously and I ask hon. Members and the wider public to judge us on what we achieve over a reasonable period of time. We are serious, and we appreciate the interest in the subject in the House and among the general public. I hope that the hon. Member for Lewes will take up our intention and that we can make progress and reach a better understanding.

Mr. Baker: Can the Minister guarantee that, by the end of the Parliament, fewer experiments will be carried out each year? Yes or no?

Mr. Deputy Speaker: Order.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — NORTHERN IRELAND

The Secretary of State was asked—

Peace Process

Dr. George Turner: What progress has been made in the peace process in Northern Ireland; and if she will make a statement. [32127]

The Secretary of State for Northern Ireland (Marjorie Mowlam): The inter-party talks are making good progress. All participants are committed to reaching a settlement. It remains the Government's intention to strive for an early agreement by Easter and to put the outcome to a referendum.

Dr. Turner: Have not fairness and equality of opportunity been at the core of the problems faced in Northern Ireland for many decades? Can my right hon. Friend assure the House that the peace process can satisfactorily address those issues and ensure that future generations in Northern Ireland, whichever side of the divide they are born and live, have equality of opportunity and fairness in their lives?

Marjorie Mowlam: Our manifesto included a commitment to an equality agenda on the basis of fairness, justice and equality of opportunity. The Government are introducing the European convention on human rights and, in relation to Northern Ireland, yesterday we launched a White Paper for consultation on equality issues, based on the principles of equality of opportunity and addressing, in particular, the question of long-term unemployment in both communities. It contains a host of recommendations based on the report by the Standing Advisory Commission on Human Rights, and copies have been placed in the Vote Office and in the Library.

Mr. Trimble: I shall not pursue the previous question, except to say how disappointed we were by the refusal of the Secretary of State to consult us before the publication of the report.
I wish to draw the Secretary of State's attention to the statement, in the European charter on local government, that local government is one of the main foundations of any democracy. Does she share with me a sense of discomfort that the United Kingdom proposes to ratify that charter purely on a Great Britain basis, without extending it in any way to Northern Ireland? Does not doing that at this juncture send people the message that the Government are not interested in ensuring democratic local government in Northern Ireland? Should not the Secretary of State bring forward—because she has not yet done so in the talks—some proposals to enable the United Kingdom to ratify the charter on a United Kingdom basis?

Marjorie Mowlam: The right hon. Gentleman began by referring to the previous question. Consultation is written into the document that was published today so that

the recommendations that it contains can be consulted on and the views of parties, voluntary groups, businesses and trade unions can be consulted on the major proposals.
As to local government and the European charter, I agree with the right hon. Gentleman that the democratic deficit in Northern Ireland is a serious issue which needs addressing. We shall consider it. We have put together papers on quangos, but the questions will be addressed in the talks in partnership. In the process of the talks, the questions can be addressed. If people want papers on subjects, we shall submit papers on those subjects, as we have done for the past three weeks, so that we can obtain a structure for Northern Ireland, with the consent of the parties, that deals with the serious problem of the democratic deficit.

Mr. McGrady: I welcome the Secretary of State's statement on the proposals for a commission to monitor equality, and especially the extension of the statutory obligation to provide equal opportunities. I draw her attention to the fact that, although the Fair Employment (Northern Ireland) Act 1989 has been in place for nearly 10 years, unemployment among Catholics is twice that among Protestants. Will she suggest targets and timetables for the eradication of that anomaly, which is offensive to the Catholic minority? I am sure that she disagrees fundamentally with the official Unionist party's comment that her programme extended false hope to the Catholic community.

Madam Speaker: Order. Before the Secretary of State replies, may I remind the hon. Gentleman and the House of my instruction only recently that I want Secretaries of State and Ministers to be asked direct questions, with no long comments?

Marjorie Mowlam: Briefly, then. The statutory obligation applying to public services and to goods and services is covered by the document. The paper makes the important point, which came out of the SACHR report, that progress has been made on tackling long-term unemployment since the enacting of fair employment legislation in 1989. We agree with the report's conclusion that systematic discrimination is not the main cause of twice as many Catholic as Protestant men being long-term unemployed. The causes of long-term unemployment are manifold, and related to the multiple causes of deprivation. In the report, we are addressing the issue of equality of opportunity to ensure that the progress that has been made under the fair employment legislation continues. At the same time, we want to target and address long-term male unemployment, which is the root of problems for both communities.

Mr. MacKay: Is not the message that must come across after the shocking and sinful murders at Poyntzpass last week that the two Governments and the constitutional parties must redouble their efforts to find a lasting settlement in Northern Ireland? Will the Secretary of State confirm that she does not intend to go over the heads of the political parties and impose a solution on the Province?

Marjorie Mowlam: I concur with the hon. Gentleman's opening comment. The soul-destroying murders of Mr. Trainor and Mr. Allen—I believe that


people have been charged this morning in relation to them—will, I hope and believe, make all those involved in the talks process and the peace process as a whole redouble their efforts. We must be sure that there is a commitment to finding some kind of accommodation. I again confirm that we have no intention of imposing any accommodation or settlement on the participants in the talks. They must own some kind of agreement, and the triple lock—gaining the consent of the parties, of the people in the referendum and of us in Parliament—is still in place.

Mr. MacKay: Will the Secretary of State confirm categorically that there will be no referendum in which the people of Northern Ireland decide on a settlement that has not been agreed by the majority of the parties in the political talks?

Marjorie Mowlam: Yes.

Mr. Öpik: Given the Government's evident commitment to holding a referendum in May, are they equally committed to holding elections in the Province in June? If elections are not held in June, when does the Secretary of State intend them to be held?

Marjorie Mowlam: It is difficult to give a specific answer. We are consulting the parties, and we must achieve a positive vote in the referendum. We should then have to find a period long enough for the election campaign and the procedures to be put in place. My view—it is not agreed with the parties, and we are still consulting them and others involved in the process—is that, the sooner elections are held, the better. The parades period and a long summer are coming up, and logistics have to be taken care of, so I cannot give the hon. Gentleman a specific answer.

Mr. McDonnell: My right hon. Friend will have noted the statement made by the president of Sinn Fein at the weekend, and appreciated its significance. Does she agree that, while we all hope for—and are working for—a settlement of some sort, an agreement or a conclusion to the existing talks, the process is on-going, regardless of any conclusion? Does she also agree that we want all the communities to achieve their respective ambitions and respect each other's views?

Marjorie Mowlam: I thank my hon. Friend for that important question. I sometimes do not emphasise enough the importance of the process in which we are involved in saying that I want to aim for the referendum on a particular date in May, but I think it important to see it as a process. There is random violence from splinter groups, which I believe will continue until the referendum, and I think that things will be difficult afterwards; but the more we view this as a process in which confidence and trust are built up as we go along, the better.

Mr. Flight: What assessment she has made of the objectives of the Government of Ireland with regard to the Northern Ireland peace initiative. [32128]

Marjorie Mowlam: The British and Irish Governments share the common objective of achieving a widely acceptable political settlement and a lasting peace in Northern Ireland.

Mr. Flight: What discussions have been held with the Government of southern Ireland about joint security

following a settlement? May I suggest that that is a crucial ingredient of both the achievement of a settlement and its success thereafter?

Marjorie Mowlam: I agree that security co-operation across the border is an important element. We have seen two very good examples. The Garda Siochana in both County Louth and County Cavan found large bombs that were not where everyone expected them to be—north of the border. I pay tribute to the Garda Siochana for the help that it has given us in the last couple of weeks, and assure the hon. Member that such co-operation goes on now and, I believe, will continue.

Mr. Mallon: Does the Secretary of State agree that the joint action by the two Governments—as represented by the joint declaration, the joint framework document and the two Governments' participation in the talks—has allowed the talks process, and enabled the participants to move towards a solution? Does the right hon. Lady also agree that, if we are to see the end of the remnants of terrorism in both the north and the south of Ireland, that joint approach must continue—hopefully with a new administration in the north?

Marjorie Mowlam: I agree that joint action between the two Governments is crucial. History shows us that, when they have not worked together, the process has run into trouble.
The hon. Gentleman mentioned some papers. There is the framework document, and a host of papers have now been submitted by the Governments in strand 1 of the talks process, at the request of the parties, and in strand 2 by the chair of the process. I believe that, as we synthesise those papers, the areas of agreement and disagreement are becoming much clearer as the weeks go on.

Mr. Peter Robinson: The Secretary of State says that the talks process is making good progress. As it ends its two-year lifespan in May, will she spend a minute or two outlining something to the House? The process was built on the premise that decommissioning must take place during it. Will the Secretary of State tell us how many handguns, rifles, rocket launchers, machine guns, explosives and detonators—and how much ammunition—have been handed in either to this Government or to the Government of the Irish Republic?

Marjorie Mowlam: Both this Government and the Irish Government take decommissioning seriously. We have agreed with the Mitchell principles. I should like decommissioning to take place tomorrow, but we have agreed with the Irish Government that it must proceed in parallel with the current process. We have a decommissioning body working, and on 25 February we published a document outlining decommissioning methods. An order on the decommissioning timetable will be dealt with in the House later. I assure the hon. Gentleman and other hon. Members that we all want decommissioning, which would be a very positive step, and a vote of confidence in the process. However, as I have told the House so many times before, I cannot force people to do it. Nevertheless, I assure him that we are doing everything that we can to encourage it.

Mr. Robert McCartney: Will the Secretary of State confirm that the type of mortar bomb used to attack


Armagh police station has never before been used in Northern Ireland by any terrorist organisation other than the Provisional IRA? Will she confirm whether there is any intelligence of any group utilising such mortar bombs for terrorist activity other than the Provisional IRA?

Marjorie Mowlam: As the hon. and learned Gentleman is aware, after the mortar attack in Armagh, one of the local police officers implied exactly that—that the only group identified with such mortars is the Provisional IRA. However, I am sure that the hon. and learned Gentleman—as a lawyer and as a Member of Parliament—will agree that one must have pretty conclusive evidence before acting—[Interruption.] I do not have conclusive evidence on the mortar attack at Armagh.

Mr. Thompson: Will the Secretary of State confirm that, irrespective of the objectives of the Irish Government or the outcome of the talks, the supreme authority of this Parliament will remain over all persons, matters and things in Northern Ireland, as part of the United Kingdom?

Marjorie Mowlam: The hon. Gentleman will know that, ultimately, part of the answer to his question lies with the parties and the people of Northern Ireland, which is where, in the talks and in the referendum, some of those decisions will be taken. I should like to add—because of some of the barracking after my previous answer—that there is not conclusive evidence. I cannot make a decision based on one person's view on who they believe did it. I need to have evidence and security advice. Then, as I acted in relation to the UDP and Sinn Fein, I shall act again.

Mr. Moss: Has the Secretary of State had any contact with the Irish Government in the light of the very serious allegations that Roisin McAliskey's fragile mental state—on the ground of which the Home Secretary refused to extradite her to Germany—was attributable to her treatment at the hands of RUC officers at the Castlereagh holding centre? In view of the seriousness of those allegations, does the Secretary of State plan to instigate an inquiry? Conversely, if she believes—as we do—that those allegations are completely without foundation, why has she not issued a statement unequivocally repudiating them?

Marjorie Mowlam: The Irish Government, like many parties involved, strongly expressed their points of view on Roisin McAliskey's situation to the Home Office and to my Department. However, as the Home Secretary made clear last night in his announcement, his decision was taken independently and was based on medical grounds, not on lobbying. The allegations that the hon. Gentleman mentions are still only allegations. The Home Office has informed me that it has received no specific submission from Miss McAliskey on allegations reported in the press, but has said that if it receives such a submission, it will not only respond to it but place it in the public domain.

Dangerous Wild Animals Act

Rev. Martin Smyth: If she will extend the Dangerous Wild Animals Act 1976 to Northern Ireland. [32129]

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Tony Worthington): Yes. The Government propose to introduce legislation equivalent to the 1976 Act under the Order in Council process.

Rev. Martin Smyth: I welcome that answer, but will legislation be introduced very soon? Although some of us believed that the days of Buck Alec's wee lion were over, we discover now that—in Seskinore and in other parts of Northern Ireland—people are keeping wild animals in abysmal circumstances, which are detrimental to animals and dangerous for people.

Mr. Worthington: Yes, it is a disturbing case and I have discussed the matter with the noble Lord Dubs, who is the Minister responsible. He is doing everything he can to bring forward legislation as quickly as possible.

Devolution

Mr. Nicholas Winterton: What representations she has received on the devolution proposals contained in the framework documents; and if she will make a statement. [32130]

Marjorie Mowlam: Those issues remain under intensive consideration within strand 1 of the multi-party talks.

Mr. Winterton: While many people believe that the devolution proposals for Scotland and Wales are designed to bring government closer to the people, will the Secretary of State agree with me that the devolved assembly under the framework is seen by many on both sides of the water as being for the purpose of taking Ulster out of the United Kingdom and putting it under the control of a foreign country?

Marjorie Mowlam: No. The devolution procedures are there to increase accountability and increase transparency and, as I made clear in answer to the hon. Member for North-East Cambridgeshire (Mr. Moss), they will be made only with the consent of the parties, and of the people, of Northern Ireland.

Mr. Maginnis: Will the Secretary of State acknowledge that the Ulster Unionist party has made it clear from the beginning of 1995 that the framework documents do not define a way forward in terms of the future of Northern Ireland; and that we have not negotiated on the basis of the framework documents, because they actually stymie negotiations and one cannot negotiate from a fixed position? Will she further acknowledge that, that apart, my party has done everything possible and made no unreasonable case to hinder negotiations, but that hindrance has come, almost exclusively, from the IRA, which refuses to move forward the parallel process of decommissioning and has had the connivance of two Governments in hindering it in that way?

Marjorie Mowlam: As I said in answer to an earlier question, a number of documents are on the table—the


framework document, the Downing street declaration and papers submitted by different parties—and the point to which everybody around the table is trying to get is to reach an accommodation, whether or not that is in line with one of those documents. If it reflects consensus among the parties, we shall readily accept the decision of the parties.
In answer to the second part of the hon. Gentleman's question, I acknowledge the courage and determination of all the parties in the talks. They have all made changes and have all tried to move to find an accommodation and I hope that that continues in the weeks ahead.

Mr. McNamara: Can my right hon. Friend confirm that, whatever the outcome of the talks, the aspiration to a united Ireland will still be permitted, allowed and, hopefully, attainable for those people who argue and work for it democratically? Will she inform the House of the number of occasions on which the Ulster Unionist party has sat down with Sinn Fein to discuss the various proposals in strands 1, 2 and 3?

Marjorie Mowlam: The answer to the first part of my hon. Friend's question is that it is about democratic participation by all in the talks, and that is where we want to arrive. As for parties siting down with each other, there has been sitting down between some parties in various locations. I am unable to give the time and place of all those occasions, but I can tell the House that, in a poll last Thursday, a majority of both communities in Northern Ireland wanted the parties inclusively to sit down and try to find an accommodation.

National Minimum Wage

Mr. Boswell: What assessment she has made of the local economic implications of the introduction of a national minimum wage. [32132]

The Minister of State, Northern Ireland Office (Mr. Adam Ingram): In Northern Ireland, as in the rest of the United Kingdom, a sensibly set national minimum wage will increase the incentive to work, will encourage firms to compete on the basis of quality, not just price, will help promote employee commitment and reduce staff turnover, and will encourage investment in training. I am pleased to note that the Bill to introduce a minimum wage has received the formal approval of the House.

Mr. Boswell: The Minister will be aware that the average wage in Northern Ireland is only 60 per cent. of that in Greater London. He will also be aware that a greater proportion of the work force in Northern Ireland is paid less than £3.50 an hour. Will he confirm that he is alert to the implications of that and has drawn those issues to the attention of the Low Pay Commission?

Mr. Ingram: We are aware of those facts and they have been drawn to the attention of the Low Pay Commission.

Mr. Hope: Does my hon. Friend agree that workers in Northern Ireland forced to live on poverty wages deserve

the same legal protection and floor under their wage levels that are about to be enjoyed by other workers in the rest of the United Kingdom?

Mr. Ingram: I am sure that all the low-paid workers, and others, in Northern Ireland will say three cheers to that and will fully endorse the National Minimum Wage Bill, which the House has recently passed.

Mr. Beggs: My hon. Friends and I are totally committed to the principle of a fair day's pay for a fair day's work. I urge the Minister to bear in mind the fact that, because of our relatively high levels of unemployment, if the level of the national minimum wage in Northern Ireland is set too high, it could damage existing jobs and the potential for new jobs. Will he assure us that the Government will be cautious, sensible and practical in setting the level of the national minimum wage in Northern Ireland?

Mr. Ingram: That is a fair point, which we have to address. As the hon. Member for Daventry (Mr. Boswell) said, we have to take account of the fact that there is a significant amount of low pay in Northern Ireland. We must be careful not to unbalance the economy as a result of the decisions on the national minimum wage. The Government are fully aware of the problem. We shall work with trade unions and industry to ensure that the Northern Ireland economy continues to prosper in the years ahead.

Mrs. Fyfe: Has the Northern Ireland Office assessed the cost to the British taxpayer of subsidising bad employers that pay terrible wages? The hon. Member for Daventry (Mr. Boswell) alluded to such low wages. Does my hon. Friend agree that the money could be spent in better ways to benefit the people of Northern Ireland?

Mr. Ingram: I have no knowledge of such an assessment, but my hon. Friend has given me an idea that I may work on as we look forward to the findings of the Low Pay Commission.

Peace Talks

Mrs. Ann Winterton: What assessment she has made of the Unionist community's reception of the progress and direction of the all-party peace talks. [32133]

Marjorie Mowlam: My assessment of the Unionist community, as with all communities in Northern Ireland, is that change is difficult, but we must all change and no one can have 100 per cent. of what they want. I know that it is not easy, but together we can build a future of non-violence that is different from the past.

Mrs. Winterton: Will the Secretary of State concede that the Unionists in Northern Ireland must feel betrayed and devastated that the peace process, which they joined in good faith, has been hijacked by Sinn Fein-IRA and could now correctly be described as the appeasement process?

Marjorie Mowlam: No, I obviously do not agree with the hon. Lady's interpretation. The Unionist community in Northern Ireland feels a lack of confidence, and fear,


because of the bomb at Moira, the bomb at Portadown and the deaths of Mr. Trainor and Mr. Allen. That is what creates fear. We are trying to create a future that does not include such events. I have already referred to last week's poll. The Unionist party leaders who are in the talks had much greater support in that poll than those outside. That is what the Unionist community thinks.

Mr. Sutcliffe: Is it not alarming and disappointing that the hon. Member for Congleton (Mrs. Winterton) has used such language when the Secretary of State, the Government, the Irish Government and the constitutional parties are trying to work for a settlement? Is not the key the fact that the majority of both communities want peace? Should not that be the driving force? Should not Members of Parliament support the Government in what they are trying to achieve?

Marjorie Mowlam: I thank my hon. Friend for that comment. Consent is the over riding principle in our policy in Northern Ireland. I hope that my hon. Friend spoke for the whole House.

Mr. William Ross: Is the right hon. Lady not yet aware that by far the greater bulk of the population in Northern Ireland are astonished, dismayed and horrified that the Government seem unwilling to accept the plain fact that the terrorist wings of some of the parties participating in the talks in Northern Ireland are still engaged in terrorist violence, including murder as the ultimate form of intimidation? Is not she also aware from what has been said today and in recent days that there is great concern in Northern Ireland that the sentence for murder appears to be a three-day exclusion from the talks process? What does she intend to do to increase the confidence of the great bulk of the population of Northern Ireland in the Government listening to the democratic voice of the people rather than the guns of murderers?

Marjorie Mowlam: We have backed wholesale the security forces—they have done an excellent job—in trying to find the people responsible for the terrorist activity that has gone on since Christmas that has been carried out by splinter groups that are not part of the ceasefire and do not support the talks process but, in fact, want to destroy it. It is clear that if any party violates the Mitchell principles in relation to the talks—and we have concrete evidence that paramilitary groups associated with parties in the talks have behaved contrary to the Mitchell principles—we will act. We excluded the Ulster Democratic party when that happened; we excluded Sinn Fein. If it happens again, I assure the hon. Gentleman that we will act accordingly.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Engagements

Mrs. Roe: If he will list his official engagements for Wednesday 11 March.

The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others.

In addition to my duties in the House, I shall have further such meetings today. This evening, I will be meeting European leaders who are in London for tomorrow's European conference.

Mrs. Roe: Will the Government agree to any request from the German authorities for Roisin McAliskey to be tried in this country for the very serious crimes she is alleged to have committed?

The Prime Minister: We have received no such request. However, if we do, it will be considered by the Home Secretary. In considering it, he will be acting in a quasi-judicial capacity. If any such request is received, he will consider it in the normal way. The decision not to extradite was taken by the Home Secretary alone, in accordance with the powers that are given him and on the basis of the medical evidence submitted.

Mr. Corbett: Will my right hon. Friend assure me that when the Green Paper on welfare reform is published, it will lead to the widest possible debate so that we can ensure that we protect those in genuine need and offer real opportunities to those who have been denied them for the past 18 years?

The Prime Minister: Yes. That is one of the reasons why the Government are already proceeding with the £3.5 billion welfare-to-work programme that helps people on benefit get off benefit and into work. We cannot carry on with a situation in which spending is up but poverty is up, too. That is precisely why the new Labour Government are undertaking the process of welfare reform in the interests of the country and, indeed, of many people who are in need.

Mr. Hague: The Prime Minister will be aware that the human rights campaigner Wei Jingsheng has met the Foreign Secretary today. Does the Prime Minister understand the amazement among such campaigners and in the United States that, for the first time in nine years, the United Kingdom will not support a United Nations resolution on human rights in China?

The Prime Minister: We have on many occasions made clear our position on human rights. We have carried on making that position clear and will continue to do so. We did not think in these circumstances that this was the right thing to do.

Mr. Hague: The circumstances are the same as they have been in recent years. Mr. Wei says that the Government's position is quite stupefying; he says that it has left victims of human rights abuses in the lurch; he says that, in 18 years in prison in China, his conditions were improved only when the international community signed declarations of this kind. Since the Foreign Secretary said that human rights would be at the heart of an ethical foreign policy, should not the Prime Minister reconsider the decision?

The Prime Minister: It is not right to say that we have not raised the issue of human rights in China. We have done so continually, both on our own account and as


president of the European Union. That is the position that has obtained throughout—not merely now, but before the election.

Mr. Hague: I am not saying that the Prime Minister has not raised the issue. If he has, it would be consistent to support this resolution. The Government proclaimed an ethical foreign policy with great fanfare and the Foreign Secretary poses unconvincingly as ethics man, yet the first time that that ethical foreign policy is put to the test there is no trace of it whatsoever. Dissidents and human rights campaigners will judge the Government by the Prime Minister's answer. Will he now reconsider that decision?

The Prime Minister: No, for the reason that I have given. We have not merely raised the issue of human rights—[Interruption.] Perhaps Conservative Members will listen to the answer. We have continually raised human rights issues in respect of China and, during our presidency of the European Union, we have received support from other European countries in making the issues at the heart of Mr. Wei's case clear to the Chinese Government. However, we did not feel that this United Nations resolution was the right way to proceed.

Mrs. Anne Campbell: Will my right hon. Friend join me in congratulating the Cambridge benefits agency office on helping its 200th lone parent back into work? One lone father said that the scheme had given him back his self-respect after many years out of work. Will my right hon. Friend join me in welcoming the national roll-out of the scheme, which has the potential to help many parents?

The Prime Minister: Yes. My hon. Friend has played a considerable part in establishing a scheme in her constituency to get lone parents off benefit and into work. The scheme also ensures that lone parents receive the proper skills training—particularly in the area of information technology—that they require to get work. A considerable number of lone parents already on the new deal programme have come off benefit and into work. As a result, they are earning far more money and not costing the state nearly as much as they used to: lone parents gain, the country gains and the state of society gains, too.

Mr. Ashdown: When Mr. Rupert Murdoch sought to purchase The Times newspaper in 1981, the then Secretary of State for Trade and Industry, Mr. John Biffen, agreed to the purchase without reference to the Monopolies and Mergers Commission on the grounds of eight conditions to preserve editorial independence that he announced to the House. Does the Prime Minister accept that that gives his Government a continuing responsibility to ensure that those conditions are upheld properly?

The Prime Minister: Of course I accept that any conditions entered into should be upheld.

Mr. Ashdown: I am very grateful to the Prime Minister for that confirmation that the Government are now the ultimate monitor of Mr. Rupert Murdoch's stewardship of The Times. I draw the Prime Minister's attention to the recent comments made by the previous highly respected east Asia editor of The Times, Mr. Jonathan Mirsky, that

give rise to deep concern about whether those conditions have been met in the case of China. In this case, should not the Prime Minister and the Government satisfy themselves that the conditions have been met? If they are not satisfied, should they not place the matter before the Monopolies and Mergers Commission?

The Prime Minister: I am not aware of the particular incident to which the right hon. Gentleman refers, but I am perfectly prepared to look into it and correspond with him about it. However, the rules that apply to Mr. Murdoch apply to all newspaper proprietors equally.

Mr. Dawson: Will my right hon. Friend join me in expressing sympathy to the Hansard reporters who, on Friday and again in the early hours of Tuesday morning, endured hour upon hour of excruciating banality? Will he also join me in hoping against hope that in future Opposition Members will come up with something interesting to say—and perhaps one or two decent jokes?

The Prime Minister: I know that my hon. Friends have campaigned very hard on this. We of course pay tribute to all those who work in the House and who must stay up and listen to Opposition Members making their points. Is it not extraordinary that the Conservative party opposed the introduction of a minimum wage that, for the first time, guarantees decent minimum standards at work? They will always choose to represent the few rather than the many.

Mr. Amess: Will the right hon. Gentleman take a sober look at early-day motion 961 and tell the House whether he agrees with his 50 Labour colleagues who have so lost confidence in the Lord Chancellor that they demand not only an end to his extravagance, but the abolition of the office?

The Prime Minister: No, I will not do that because the Labour manifesto commitment to reform of both criminal justice and legal aid is clear and we are carrying it out with the excellent services of the Lord Chancellor.

Ms Drown: Will the Prime Minister join me in wishing Mr. David Hempleman-Adams, the British explorer who was born in my constituency, the best of luck in his attempt, which he started only last week, to be the first person to reach the north and south poles and the highest peaks of every continent?

The Prime Minister: Yes, I am delighted to do so. It is a marvellous example of co-operation between the Norwegian and British people, and I wish the expedition every success.

Mrs. Lait: When will the right hon. Gentleman live up to his promise of rooting out corruption in local government in towns such as my home town of Paisley and in Glasgow, Doncaster, Hackney and now Hull? Is not it obvious even to him that Labour councils are riven with dissent and rotten to the core?

The Prime Minister: Every time there have been allegations of corruption in Labour councils we have investigated them, in stark contrast to a Conservative party, which allowed corruption and wrongdoing to carry


on in Westminster council and for years did nothing—but that is the difference between Conservative and Labour values.

Lifelong Learning

Mr. Chaytor: If he will make a statement on his plans to increase opportunities for lifelong learning.

The Prime Minister: I know that my right hon. Friend and other hon. Members have taken a keen interest in lifelong learning. The lifelong learning Green Paper was published on 25 February. We believe that it is essential that if we are to create the type of economy that we need in future, people should be able to train and re-skill throughout their lives. Our proposals will make a significant start on that.

Mr. Chaytor: Is my right hon. Friend aware that, last year, more than 50 per cent. of further education colleges—colleges responsible for about 4 million students—experienced financial deficits due largely to the imposition of the internal market and the unfair funding methodology used by the previous Government? Will he assure the House that, after the reform in the financing of university education, the Government will introduce a substantial new investment in lifelong learning, particularly for the overwhelming majority of young people and adults who have never had any prospect of going to university?

The Prime Minister: "I personally believe that" the Conservative
failure in 20 years to significantly improve the level of public education is one of the areas that
they should be
most…ashamed of.
[HON. MEMBERS: "Rubbish."] Opposition Members shout "Rubbish" but I am quoting Steven Norris, who was a Minister in a previous Government. He went on to say:
you can acquit Labour of the charge of not being prepared to take the issue on.
Mr. Norris is right. What is more, as a result of the additional money that we are putting into further education, the university for industry, the £150 million to help people with training and skilling in the individual learning accounts and the 500,000 extra people who will go into further and higher education as a result of Government reforms in the next five years, we are at last making a start on getting the lifelong learning society that we need for the future.

Mr. Boswell: As I am sure the Prime Minister will want to acknowledge the achievements of the previous Government in giving the further education sector independence and pressing forward to advance adult literacy measures, will he explain his priorities in converting the White Paper that was promised into the Green Paper on adult learning that was delivered?

The Prime Minister: We have always made it clear that there should be a proper process of consultation. Some elements in that—for example, the individual learning accounts and the extra £150 million that we are putting into them—will happen in any event, which is

extremely important. I acknowledge that the previous Government made some changes in adult literacy that we would support, but they cut funding drastically—particularly funding for further education, which was cut way below its tenable level. That is precisely why we are spending an extra £100 million on it next year, which I hope the hon. Gentleman will welcome.

Engagements

Mrs. Gorman: Given the fact that Conservative Wandsworth, despite a 10 per cent. cut in grant, has introduced the lowest council tax rate in the country, whereas Labour Liverpool, with a 10 per cent. increase in grant, has introduced the highest, will the Prime Minister—who is a canny Scot—recommend people who have their heads screwed on the right way to vote Conservative on 7 May?

The Prime Minister: No, I believe that people had their heads screwed on the right way on 1 May last year. In fact, the average council tax rise in Liverpool is about 5.5 per cent. It is true that Wandsworth has reduced its council tax, but that is largely because of the reserves that were built up under the previous Government. Perhaps the hon. Lady would like to reflect on the fact that, whereas Westminster has an increase of about 7 per cent., Islington has an increase of about half that.

Ms Kelly: Can the Prime Minister confirm that Government borrowing has fallen dramatically in the 10 months since the election? Is not that a clear example of the benefits of stable economic management and an end to boom and bust? Does not it represent an endorsement of the old slogan, "You can never trust the Tories with your wallet"?

The Prime Minister: Conservative Members might like to know that, under the Conservative Government, national debt doubled. As a result of Conservative mismanagement, we shall have to pay out more in interest payments on our debt than we spend on the whole of the schools system. We inherited a structural budget deficit and the return of inflation to the system. By giving the Bank of England independence in the setting of interest rates and by tackling the structural deficit, we have the chance for the first time in generations to end Tory boom and bust and to have prudent, stable management of the economy.

Mr. Hague: Who is to blame for the fact that this year's council tax rises average out at a record—the Government or councils?

The Prime Minister: The council tax rises are precisely those that were forecast by the Conservatives when they were in government. It is a bit of an own goal for the right hon. Gentleman to raise as an issue the very council tax rises that he supported when in government.

Mr. Hague: It is a bit of an own goal to say the opposite of what the Deputy Prime Minister said; he said that council tax increases would have been 7 per cent. under Conservative plans but will be 8.5 per cent. under the Government's plans. When will the Prime Minister start taking responsibility for his own decisions?


The spending plans are his: it has been his decision to penalise the shire counties and neglect the rural areas once again; and it has been his decision to give one of the highest grant increases to Sedgefield, by some happy coincidence. Is it the responsibility of the Government or of councils?

The Prime Minister: It is the Government's responsibility to set spending limits. The point is that the spending limits are precisely the ones that we inherited, which is why it is patently absurd for the right hon. Gentleman to say that all this is the result of a Labour Government. In fact, the bills are rising in exactly the way they would have under the Conservatives. If people look back on Conservative administration of local government over the past 18 years, they will remember most not what the Labour Government have done now or in the past year, but the poll tax, for which the Tories were responsible.

Mr. Hague: People will remember that the Prime Minister said before last year's general election that there would be no tax increases at all. They will remember that they now pay higher council taxes, higher pensions taxes, higher savings taxes, higher mortgage taxes and higher business taxes. Are not people entitled to feel that they were conned at the election?

The Prime Minister: No. First, on council tax, we said that we would abide by the spending limits that we inherited, which is precisely what we did. Secondly, we said that we would not raise the basic or top rate of income tax, and we have kept that promise. The contrast lies in our keeping that promise and a Conservative party that, in the 1992 general election, said it would not raise VAT and that it would cut the tax burden year on year, but then imposed VAT and the largest tax rises in peacetime history. That is the difference between Labour and Tory Governments.

Mr. Burgon: Can the Prime Minister update us on the bid to hold the world cup in England in 2006? Does he agree that if we are to guarantee the success of the bid, one of the venues must be the great city of Leeds?

The Prime Minister: We certainly hope that we shall be able to host the world cup in 2006. We are making a strong bid to do so. About £600 million has been spent on British stadiums over the past period of time. I think that we have all the right facilities to make a successful world cup bid and I am quite convinced that we can do so.

Dr. Tonge: Does the Prime Minister agree that taxes are a way of providing good public services? Does he also agree that, as good local services are provided in the Richmond part of my constituency and our council tax rise this year will be of the order of 2.3 per cent., perhaps the electorate would like to consider voting Liberal Democrat?

The Prime Minister: I am sure that they will consider it. Of course it is important that the taxes that are raised go to provide decent public services. I cannot comment on the hon. Lady's particular situation in Richmond, but I can say that as a result of what the Government have done and their prudent management of finances, we are

going to get extra money into schools and hospitals this year, extra money for pensioners and we have been able to cut VAT on fuel.

Dr. Desmond Turner: May I bring my right hon. Friend back to the issue of benefits? Despite the assurances that he and other Cabinet colleagues have given, will he reiterate that there is no intention to hit people on disability benefits? People are still anxious. Can he give an assurance to people who depend on disability benefits that they have nothing to fear from the benefits review?

The Prime Minister: I can certainly say that those people who are in need and disabled have nothing whatever to fear from the review. The plain fact of the matter is that the present system, as many who are disabled accept, is over-complex, often does not help those most in need and often does not give people the help that they need to get off benefit into work where they want to do so. Many disabled people would like the chance to work full time or to do some sort of part-time work. One of the reasons the Government have committed an extra £200 million out of the new deal to helping the disabled is precisely to give them that opportunity and freedom. People should pay no attention to the scaremongering, but they should realise that the Labour Government are undertaking necessary reform that will work in the end to their interests.

Dr. Julian Lewis: How can the Prime Minister justify the following actions taken by the Government at the end of last year: blocking a Bill to protect women from rape in psychiatric units, stopping due recognition for Sean Connery on account of his support for Scottish nationalism and the different treatment accorded to Professor Eric Hobsbawm, a lifelong communist who just happens to be the father of the business partner of the girlfriend of the Chancellor of the Exchequer?

The Prime Minister: I have now remembered the pedigree of the hon. Gentleman. I have a terrible feeling that he was in the Labour party at one time. He then went to the Tory party. To judge by today's question on Sean Connery, he is about to go to the Scottish nationalists. He was pretty wacky then and he is pretty wacky now.

Mr. McWalter: My right hon. Friend will be aware that some health authorities and trusts think that the Conservatives are still in power and are trying to cut services. In some cases, they are contemplating closing over-subscribed hospitals. Will my right hon. Friend emphasise to such health authorities and trusts the Government's commitment to major improvements in health funding this year and in future years so that they can plan on a proper basis for the medium term and give people the assurance that they will receive a much better service from the NHS than they did under the previous regime?

The Prime Minister: We have put into the health service an extra £300 million over Conservative spending plans this year and an extra £1.2 billion goes in next year. That is a tremendous additional investment for the national health service. Of course, decisions about how to


spend that money are taken on the ground. Health authorities must take decisions on the basis of local health needs as they see them, but it is important that we make sure that the NHS modernises, changes and adapts. We will get the investment in, but it comes in return for fundamental reform that helps the patients who need a decent health service for the future.

Mrs. Browning: If a Labour Member of Parliament fails to declare a directorship and subsequently becomes a Minister of the Crown, should he resign? If not, why not?

The Prime Minister: Those are matters for the Parliamentary Commissioner, as the hon. Lady knows. I know the case to which she refers. Her question is part of the usual Conservative smear campaign and I have not the slightest intention of getting into it.

Mr. Connarty: Has my right hon. Friend seen the National Audit Office report today on water pensions, which confirms what we suspected: that the public were ripped off by the Tories over water privatisation? Following on the scandal of the great rail report of last week, will my right hon. Friend instruct an investigation into all the privatisations that took place, to see just how badly the Tories swindled the public?

The Prime Minister: I am sure that the National Audit Office will continue to make investigations. It is extraordinary that, as a result of Conservative privatisation, literally hundreds of millions of taxpayers' money, which could have been spent on better services, was lost and squandered. The fact that the Conservatives behaved so badly when privatising some of our essential public services is why they must never be allowed back in charge of those services again.

Ministerial Visits

Mr. Page: What plans he has to pay an official visit to South-West Hertfordshire.

The Prime Minister: I have no immediate plans to do so.

Mr. Page: I am devastated by that response. I would like the Prime Minister to come to my constituency because I would like him to explain to my constituents the fourth of his six election promises, which he will have at the forefront of his mind—that to reduce waiting lists. I want him to explain to my constituents who use the hospitals in the area why waiting lists have increased, depending on the category, by 7.5 per cent. up to 28.9 per cent. Some people are now waiting more than 18 months, when there was a zero wait before. Can he tell us the value of a Prime Minister's pledge at election time?

The Prime Minister: The value is that the pledge will be met, in precisely the way that we said at the election.

The hon. Gentleman is complaining about national health service waiting lists, but they have been going up for about three years. I do not remember his uttering a word about NHS waiting lists before the election. As they are going up as a result of the financial constraints, and as we are putting £1.5 billion more into the health service than the Conservative Government he supported were prepared to do, we will get them down and the public will know that had they left the health service in the hands of a Conservative Government they would have carried on rising and rising and rising.

Engagements

Mr. Crausby: Does my right hon. Friend welcome the fact that Britain will soon have, for the first time in our history, a national minimum wage that will protect our people from the low wages that create poverty? Does he relish the prospect of fighting the next general election against an out-of-touch Conservative party that will no doubt campaign on the slogan, "Vote Tory and return to poverty pay"?

The Prime Minister: My hon. Friend makes an interesting point. We do not yet know from Conservative Front Benchers whether they will abolish the minimum wage. [HON. MEMBERS: "How much is it?"] Oh, I see—it all depends on the amount; otherwise they will keep it, will they? That is very interesting; we were very near to getting the first policy commitment from the Conservative party.
The Conservative party opposes the minimum wage. The Conservatives would not want anyone connected with them to be working for these poverty rates of pay, but they are opposed to essential fairness at the workplace. We need a minimum wage to save the £3.5 billion benefits bill that subsidises low pay and because a proper minimum wage is an essential basis of a decent, civilised society—but then those are values the Conservatives would not understand.

Mr. Martin Bell: Will the Prime Minister consider the advantages of a Whips' ceasefire on these occasions so that Members might ask the questions they wish to ask rather than those they have been encouraged or instructed by others to ask? Would this not be to everyone's benefit, including his own?

The Prime Minister: The hon. Gentleman has just asked me a question—I am not quite sure how he wants me to reply, other than to say that people are free to ask whatever questions they want. As everybody knows, nobody could be a more democratic, open and understanding leader than me. Perish the day that anyone is encouraged to ask any question at all. However, if he listens to the questions asked by Conservative and Labour Members, he will see that the questions about schools, health, pay, living standards and crime are asked by my hon. Friends, and not by Conservative Members.

Points of Order

Mr. Andrew Rowe: On a point of order, Madam Speaker. On Monday, I took off the letter board a parliamentary reply, dated 6 March, from the Secretary of State for Health. It was a fairly straightforward reply, referring me to an answer that he had given on 20 January. What makes this reply remarkable is that the question was put down on Thursday 15 January. This is the worst but by no means the only example of questions taking an inordinate length of time to be answered, especially when they are totally straightforward. It suggests either that Ministers' offices are in such disarray that we should be anxious about the quality of government, or that they are treating Members of Parliament with considerable contempt. Could we have some guidance to Ministers on treating us properly?

Madam Speaker: I am grateful to the hon. Gentleman for giving me advance notice of his point of order. I have indicated to the House before that I do not intend to comment on the quality of ministerial replies. I regard it as important, however, that Members of Parliament should receive replies to written questions within a reasonable time frame. In this case, it is difficult to discern from what the hon. Gentleman says any reasons for the delay. I expect that he has made his own inquiries—I would hope that he had and would know the reasons. However, I hope that the Minister concerned will look into the matter—there are those on the Government Front Bench who will make a note of this, no doubt—and let both me and the hon. Gentleman know precisely what has occurred. However, I expect hon. Members to make their own inquires and not to expect me to be their administrative officer.

Mr. Kevin McNamara: On a point of order, Madam Speaker. In her supplementary question, the hon. Member for Beckenham (Mrs. Lait)—who has since left her place, unfortunately—read out a list of councils, accusing them of corruption and sleaze, and included among them the city and county of Kingston upon Hull, which I am happy to represent. At no time have the district auditor or the police found any fault in the administration or services of the city and county of Kingston upon Hull. That was a despicable thing for the hon. Lady to say about people of integrity.

Mr. Ian Bruce: On a point of order, Madam Speaker. I caught your comment about your becoming a guardian and trying to get answers from Ministers.

Madam Speaker: No, I did not say that at all. The hon. Gentleman had better make his point of order to me precise and clear, because I am precise as to my position.

Mr. Bruce: Indeed. As you will know, I have been pursuing with the Leader of the House the matter of getting answers from Ministers. She wrote to me some weeks ago and then had to admit that her office had lost

the letter that I had sent, in which I gave chapter and verse on what was going on, so how can we get answers from the Leader of the House without your helping us?

Madam Speaker: Perhaps there should be a new filing system. It was rather better when there were no computers. We all knew where the papers were.

Mr. Harry Barnes: On a point of order, Madam Speaker. I understand that, last night, at St. Stephen's entrance, it took members of the public 20 to 40 minutes to clear the security procedures and get into the House. Security is important, but so is access. I believe that the delay arose because, after 7 o'clock, the security screening facilities are reduced from three screens to one. Can you examine that matter, because it is important that our constituents have a right to approach hon. Members and to attend meetings and other activities that take place here?

Madam Speaker: I shall certainly look at the matter, as it is quite serious. I see the Serjeant at Arms each morning about such matters, and he would have reported it to me had it been as serious as the hon. Gentleman suggests. However, I shall certainly take up the matter and see what the situation is.

Mr. Tam Dalyell: Further to the point of order raised by my hon. Friend the Member for Hull, North (Mr. McNamara), Madam Speaker. I ask in general terms what your reaction is to those who make unsubstantiated assertions, to the detriment of local authorities and often without any grounds whatever. Will you reflect on whether there should be guidelines on what is said about local authorities in the House, off the cuff and often without any substantiation whatever?

Madam Speaker: There are, of course, guidelines in "Erskine May" on the language to be used in the House. Too few hon. Members pay attention to our procedures, but "Erskine May" lays them down clearly. We have tremendous privileges in the House in terms of freedom of speech. I have always encouraged and tried to persuade hon. Members to temper that privilege with responsibility. The privileges that we have are enormous, but hon. Members must take on board the responsibilities that come with that privilege. I hope that, after this exchange, hon. Members will take to heart what has been said on the matter.

Mr. Nicholas Winterton: On a point of order, Madam Speaker. I seek clarification. Am I right that all hon. Members are responsible for what they say in the House? Hon. Members should be concerned and careful about what they say—which may be detrimental to other people or bodies outside the House and do them great damage—when there is no substantive evidence to back up what they may have said.

Madam Speaker: That is precisely what I said. What we say in the House must be tempered with responsibility. Too many hon. Members do not recognise that responsibility.

Mr. David Trimble: On a point of order, Madam Speaker. You may recall that during Northern


Ireland questions there was a passing reference to the White Paper on employment equality, which was one of the three proposals in the Labour party's manifesto with regard to Northern Ireland, and was consequently a significant proposal. The White Paper was, I believe, launched at a press conference in Belfast this morning. I understand from what happened here today that the Government have made no effort to make a statement to the House, so that hon. Members can know the details of this important policy and ask questions.
I draw this matter to your attention because the Government have done that too often, and the people of Northern Ireland have been left with the feeling that the Government are more interested in the two Members who do not attend the House than in the other hon. Members who were necessarily here today, but who were unable to find out about the press conference in Belfast.

Mr. McNamara: Further to that point of order, Madam Speaker. May I draw your attention to the fact that the White Paper has been available in the Vote Office since early this afternoon? I got my copies long before Question Time.

Madam Speaker: That answers the point of order raised by the right hon. Member for Upper Bann (Mr. Trimble).

Housing Service Charges (Amendment)

Mr. Barry Gardiner: I beg to move,
That leave be given to bring in a Bill to amend the Housing Act 1996 to enable certain county court cases initiated on or before 1st September 1997 to transfer to a leasehold valuation tribunal.
I beg your indulgence, Madam Speaker, because it is my confirmed intention to bore the House for the next 10 minutes. In itself, that would be nothing remarkable. Many right hon. and hon. Members have carved out distinguished careers for themselves, by doing little else. A spirit of generosity prevents me from mentioning the right hon. Member for Hitchin and Harpenden by name—but I am confident that even he would not have made so bold with you as to confirm at the outset of his peroration that boredom in the Chamber and tedium for right hon. and hon. Members was his express intention.
Please understand, Madam Speaker, that I am not perverse by nature—but I have been informed that for a ten-minute Bill to have any chance of success, it should be plangently unexciting, debilitatingly humdrum and tediously technical. I am told, furthermore, that if one can show that the objective that the Bill would achieve is, after all, only something that everyone already assumed was the case, given that the Bill is properly drafted, the prospects for its passage through the House, if not a Robin Cook hot-tip racing certainty, are at least not impossible.
My Bill is every bit as uninteresting as I have claimed. In introducing it, I must pay tribute to the work of Karen Wolfson of The Independent, Mira Bar-Hillel of the Evening Standard, and the wonderful Sarah Pennells of the BBC "Money Box" programme. All those journalists have sought to highlight the problems of leaseholders and are currently campaigning for total reform of the law in that area.
My Bill is more limited. It refers to section 83 of the Housing Act 1996, which in turn amended section 31 of the Landlord and Tenant Act 1985. It refers to the Housing Act 1996 (Commencement No. 11 and Savings) Order 1997—statutory instrument No. 1851 of that year—especially to the schedule to that order, which is entitled, "Savings".
As an absolute and ultimate token of my intention to be as uninteresting as possible, I shall even quote a speech made by the hon. Member for Hertsmere (Mr. Clappison) when, speaking from the Government Benches on 22 July 1996, he accepted the need for such a measure:
The measures in the Bill to help protect leaseholders of residential properties were prompted by the bad actions of a minority of landlords who were imposing unreasonable, and in some cases outrageous, service charge demands. Any leaseholder who contested those claims was faced in some circumstances with the immediate threat of forfeiture and an action, usually in the High Court. There are measures in the Bill that deal with this abuse and provide that forfeiture proceedings can no longer be taken until the disagreement about service charges is resolved. This is a significant step to help leaseholders, an important part of our package of reforms which will materially improve the lot of leaseholders.
Leaving the problems of forfeiture to one side, leaseholders currently have the right to challenge unreasonable service charges or to seek to have a new manager appointed if they can show fault with the current manager, but these jurisdictions lie with the county court. The second stage of our proposals is therefore to switch these cases to the leasehold valuation tribunals.
This move has been widely welcomed, on the ground that the tribunal will offer leaseholders a much more effective and cheap method of taking action against the unreasonable behaviour of


landlords. This is because leaseholders have found it extremely difficult to challenge freeholders' actions in the courts. Although the initial court fee may be low, leaseholders often face protracted and potentially expensive litigation, and if they lose the case they are exposed to the risk of paying the costs of both sides. Even in normal cases that last for, say, two days, the likely exposure to costs can run into thousands of pounds.
The advantages of going to leasehold valuation tribunals are considerable. They have quicker, less formal procedures, and there is no need for full legal representation. The tribunal will include a professional surveyor who is fully qualified to assess the technical arguments that are likely to arise.
The other important point is that tribunals cannot award costs, so the exposure of leaseholders to the risk of costs will be much reduced."—[Official Report, 22 July 1996; Vol. 282, c. 47.]
That is an admirably clear account of the intention behind section 83 of the 1996 Act as it relates to the transfer of cases from the county court system. In passing, I shall endanger the parliamentary career prospects of the hon. Member for Hertsmere, by making so bold as to commend his work on the matter at the time, when the measures were being discussed in Committee and passed into law.
None the less, there is a real problem. The intentions of the House are not always successfully translated into legislation. The right to transfer a case from the county court to leasehold valuation tribunals now exists, but hundreds of people have, in a quite unintended and unforeseen way, been denied access to that right. The reason for that is that the commencement order that brought the section into effect stipulated that it should not have effect in relation to service charges when court proceedings had begun before the commencement date itself.
In all the debates in this House, by their noble Lords in another place and in Committee, neither I nor the staff of the House of Commons Library have been able to discover a single reference that might have implied that such cases should be excluded.
I quote from a letter from a well-known company of solicitors, Messrs Mishcon de Reya, whose experience in leasehold cases is not inconsiderable. Mr. Philip Freedman states:
I think I am right in saying that the way in which the transitional provisions of the commencement order operate was not generally known prior to the commencement order being made and plainly is operating in a very unfortunate way for those tenants who are the subject of Court proceedings which landlords instituted before the order came into force. Further, it is distinctly possible that landlords who saw the commencement order shortly after it was published may have commenced proceedings in the County Court between the making of the order and 1st September in order to avoid the LVT jurisdiction.
Mr. Freedman called that legal loophole "very unfortunate"; Ms Charlotte Martin calls it something else. In her dispute with her landlord over her one-third share of capital works, a total of some £3,000, her landlord has used the court to run up a bill of more than £20,000. Ms Martin says:

The law is being used and abused as a blunt instrument wielded by millionaires who exhibit a flagrant disregard for the wishes and intentions of those in Parliament who drafted the 1993 and 1996 legislation…The law must be changed in order to properly protect leaseholders from what is in effect licensed blackmail and bullying of the worst kind.
Ms Martin is not alone in being bullied in this way. When Mr. Ray Randall went to court with his landlord over the cost of a new window, the landlord arrived with 11 barristers. The cost of 11 barristers for a two-day court hearing may seem somewhat excessive in relation to the cost of one window, but it may stagger the House more to discover that Mr. Randall is being sued for its cost when he was the only tenant in the entire block of more than 30 flats not to have had a new window fitted.
In another case, Ms Fiona MacMillan was told by her landlords that the cost of painting the communal hallway of her building and the front wall was to be £25,000. She challenged her service charge bill, in which her share was put at £3,900, and she now faces, should she lose her case, legal costs of more than £12,000. She is naturally afraid to pursue the case for fear of losing her entire property.
Tremayne Investments Ltd. of Brighton provides a troubling example of just what form such bullying can take. In a letter to its tenant in relation to a disputed service charge, it states:
You will also be aware that, in the event of a Judgement against you, every Bank, Building Society and Credit Agency in the UK will be automatically informed and that your ability to borrow money and/or obtain mortgages and credit facilities in the future will be reduced severely or to nothing for many years.
In fact, that letter is not only extremely unpleasant in its tone, but inaccurate. There is no automatic notification of credit agencies. The correct position is that if the money remains unpaid for 14 days, the judgment is registered with the Registry of County Court Judgments. However, if it is paid within the 14-day period, it has no effect whatever on a person's credit rating. Of course, that is always assuming that the tenant does not win the case.
But all that is to pile Pelion on Ossa. The House understands only too well the bullying tactics of unscrupulous landlords. That is why the Housing Act 1996 was amended to introduce the provisions that it did. Sadly, the commencement order provision has denied the intended remedy to many honest people. My Bill seeks to rectify that injustice.

Question put and agreed to.

Bill ordered to be brought in by Mr. Barry Gardiner, Miss Anne Begg, Mr. David Lepper, Mr. Tony Colman, Mr. Gordon Prentice, Mr. Ivor Caplin, Mr. Andrew Dismore, Ms Karen Buck and Kali Mountford.

HOUSING SERVICE CHARGES (AMENDMENT)

Mr. Barry Gardiner accordingly presented a Bill to amend the Housing Act 1996 to enable certain county court cases initiated on or before 1st September 1997 to transfer to a leasehold valuation tribunal: And the same was read the First time; and ordered to be read a Second time on Friday 20 March, and to be printed [Bill 143].

Orders of the Day — CONSOLIDATED FUND (NO. 2) BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith, pursuant to Standing Order No. 56 (Consolidated Fund Bills), and agreed to.

Question, That the Bill be now read the Third time, put forthwith, and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — School Standards and Framework Bill

As amended (in the Standing Committee), considered.

Ordered,
That the Bill, as amended, be considered in the following order, namely, New Clauses relating to Part I, amendments relating to Clauses 1 to 19 and Schedule 1, New Clauses relating to Parts II to IV, amendments relating to Clauses 20 to 106 and Schedules 2 to 25, New Clauses relating to Parts V to VII, amendments relating to Clauses 107 to 130 and Schedules 26 to 31, Remaining New Clauses, New Schedules.—[Mr. Blunkett.]

New clause 8

INFANT CLASS SIZES

'.—(1) This section applies to any local education authority where the average infant class sizes in their area is a number at least three below the limit currently specified for the size of infant classes at maintained schools in their area imposed by regulations set out in accordance with section 1, and where there are no infant classes at maintained schools whose size is more than five above the limit referred to above.

(2) Local education authorities to which subsection (1) applies shall be exempted from the requirements of section 1 (4) and the requirements of section 2.'.—[Mr. Dorrell.]

Brought up, and read the First time.

Mr. Stephen Dorrell: I beg to move, That the clause be read a Second time.

Madam Speaker: With this, it will be convenient to discuss Government amendments Nos. 79 and 80.

Mr. Dorrell: I welcome one of the Government amendments that is grouped with new clause 8. It is nice to begin on a positive note, although I am not sure that we shall return to it too often.
Government amendment No. 80 substitutes the word "shall" for "may" at the beginning of clause 3. It is a simple amendment, and the idea behind it is not complex. The issue arose in Committee, when we sought to argue with the Government that they should be under an obligation to provide local education authorities with the money necessary to redeem the infant class size pledge. In arguing that case, we reminded the Government that they had given a firm commitment on that point as the background to the infant class size pledge. I was pleased when the Minister for School Standards responded to the debate by saying that he had some sympathy with the amendment that we had tabled, but that he needed to improve the drafting of it. I welcome the fact that the Minister has brought back the idea that the Committee approved, and the drafting has, no doubt, been much improved, although quite how eludes me. The amendment that I tabled in Committee was withdrawn at the Minister's request, but precisely the same wording has been brought back to be approved by the House. I congratulate the Minister on the improved drafting that that represents; after the debate, he might explain behind the Chair how that improvement was achieved.

Mr. Phil Willis: I appreciate that the right hon. Gentleman was up late last night, in Durham, but he seems to have had a memory


lapse. I clearly recall that it was my hon. Friend the Member for Bath (Mr. Foster) who made the suggestion to which the Minister for School Standards responded.

Mr. Dorrell: I shall consult the record, but I have no doubt that the same thought occurred to us both and was supported on both sides of the Committee. I merely wished to congratulate the Minister on the improved drafting of a single word.
More seriously, I wish that I could be more positive about the way in which the Government have reacted to the arguments that we made in Committee about the need for the delivery of their class size pledge to be made more flexible in the Bill. I want to be clear about what I think should be the attitude to class size in infant schools. Of course, I accept that, if all else is equal, it is better to be taught in a smaller class than in a bigger class. That is simple common sense and has never been the subject of any argument. Furthermore, I accept that research by the Office for Standards in Education has shown linkage between late educational attainment of individual children and class sizes in infant schools, which is why the Government have focused class size policy on five, six and seven-year-olds and have not, as Liberal Democrat Members argued in Committee that they should, extended that principle higher up the age range.
I accept the Government's focus on infant classes, but the key principle is to recognise that class size is not and never can be the only factor to be taken into account when making decisions about the use of resources in individual schools and about which school represents the best educational opportunity for a particular child. The academic proposition that, if all else is equal, it is better to be taught in a smaller class than in a bigger class should always be judged in conjunction with other, conflicting considerations.
Let us consider what parents and teachers must take into account when deciding whether a child's best interests would be served by putting him in a particular class. First, local priorities vary. In certain circumstances, a head teacher may decide to use extra resources to take on extra teachers, to reduce class sizes all the way up the school, but, in others, it may be in the interests of the children to buy extra equipment, to improve buildings or to deal with other priorities that face the school.
It is better to leave decisions on how best to use financial resources to improve educational opportunity for children to the head teacher and governors of a school, rather than to impose a statutory obligation, which would apply in all circumstances, that a class size of 29 is always better than one of 31. Local priorities vary, and it would be over-simplistic to impose a single statutory framework.

Mr. Bob Blizzard: Does the right hon. Gentleman believe that there should be a limit on class sizes? The new clause suggests 35 pupils, but would he accept 40, 45 or 50? Surely a line must be drawn. We are not arguing about whether standards would be improved in a class of 22 pupils rather than one of 20, but does he accept that there is a case for an upper limit?

Mr. Dorrell: As the hon. Gentleman acknowledged, the new clause recognises the case for an upper limit, and would provide a framework to introduce flexibility to local decision making, which is the key to delivering the

objective that we all share: ensuring that five, six and seven-year-olds receive the best possible education. The hon. Gentleman was a member of the Standing Committee, and knows that we considered a wide range of amendments. The new clause ventilates the principle that the system should be more flexible than the Government's simplistic legal obligation will allow.

Mr. Blizzard: If the right hon. Gentleman accepts an upper limit, perhaps 35 pupils, why did not his party introduce such a limit during 18 years in government?

Mr. Dorrell: The new clause would allow a local education authority that achieved an average class size of three below the Government target—27, for this target group—the flexibility to have class sizes of up to 35. The new clause would deliver the principle for which the Government have an electoral mandate—focusing on reducing class sizes for five, six and seven-year-olds—in a way that is consistent with efficient use of resources and efficient delivery of the objective that the hon. Gentleman and I share: securing the best possible education, in local circumstances, for individual children. This is merely another suggestion, originating from the same stable as several others made in Committee, of a means by which the principle of flexibility could be introduced.
My first proposition is that local circumstances vary. My second—which must undermine the simple principle that it is always better to be in a class of 29 than to be in a class of 31—is that different teachers perform at different levels. It is patently true that, in a profession the vast majority of whose members are dedicated people doing their best—often in difficult circumstances—to deliver a high-quality service, some will perform better than others. Surely to goodness, when deciding about class size against the background of the different skills and experience of individual teachers, a head ought to take that into account. It is nonsense to say that it is always better to be in a class of 29, even if the teacher is young and recently qualified and has had some difficulty in qualifying, than to be in a class of 31 taught by a very experienced, highly qualified and successful infant school teacher.
4 pm
The third principle on which I base my case for flexibility is that parents' priorities vary when they are choosing a school. As a recent recruit to the Roman Catholic Church, my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) has made a strong case in the newspapers for Catholic parents to be able to choose Catholic education. Some parents will have a strong desire for their children to be educated in Catholic schools; others will have a strong desire for their children to be educated in Church of England schools; others will have an equally strong desire for their children to be educated in secular schools. Although we have an established Church, not everyone wants their children to be educated in schools with a religious ethos. Some people will want their children to be educated in Jewish or Muslim schools, or in specialist schools of other kinds.
The Secretary of State is conferring with the Minister. I suspect that he is recording the fact that this week he used the grant-maintained school legislation to introduce a further principle of diversity in the religious basis of


education. I congratulate him on that, and I am pleased that our legislation gave him the opportunity. No doubt he has asked himself how he could have done it without that legislation.
The important point is that parents want, and ought to be able to have, the maximum opportunity to ensure that their choice for their children reflects such considerations. I am not talking about an absolute consideration—the factors that I am citing must be balanced against each other—but those factors ought to be taken into account alongside the Government's doubtless justifiable desire for infant school classes of no more than 30.
Family circumstances are another consideration. Never mind expressions of preference; family circumstances vary. Parents will often be influenced by where siblings go to school. We discussed that in Committee. Parents may want children to go to the same school as their siblings; they may also want them to go to a particular school because the sibling is at another school. That may be more convenient from the family's point of view, because the school concerned is grouped with the school of their choice rather than with their second or third choice. The location of relatives or child care is another consideration. In the real world, parents must bear all those factors in mind when choosing schools.
Finally, there are factors specific to rural areas. It was vaguely amusing to see the Minister for School Standards promoting in Committee a Bill whose effect will be to give the adjudicator power to make decisions—which are currently made by the Secretary of State—on the closure of rural schools, and to see him then, on the day before the countryside march, rush off to a television studio, dressing himself in the clothes of a friend of the countryside, to say that the power that he is transferring to the adjudicator should be transferred back to the Secretary of State.
Later in the debate, my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) will move a new clause to give effect to the Minister's policy, and I look forward to hearing his support for that policy, which he announced from Millbank tower on the day before the Millbank march—the countryside march—[Interruption.] The Millbank march is something that the Minister does quite often.
The Minister has not yet had an opportunity to table a new clause, so we have done it for him. Undoubtedly our new clause is technically flawed, but he will be able to move his own in another place, to give effect to his policy—which I merely wish to endorse. I merely wish to help ensure that he does not miss the opportunity to include it in the Bill.
In the real world, all those considerations have to be balanced against that of class size—a subject on which Ministers, when they are in a corner, betray considerable sensitivity. When the Standing Committee was debating those matters, the Minister issued a press release, which I do not think was circulated to all members of the Committee. None the less, I have—for greater accuracy, as they say—obtained a copy. It stated that
in rural schools, extra money will be provided for a new teacher so that a child can attend their local school in a class of 30 or fewer and not be forced to travel an unreasonable distance to go to a school which has empty places.
Although I am delighted for rural schools, I just wonder why that applies only in rural schools and not in urban schools. I should not have expected to have to remind

the Government that a majority of people in the United Kingdom live in urban communities. Presumably the Government's pledge applies equally to urban communities and rural communities.

The Minister for School Standards (Mr. Stephen Byers): The right hon. Gentleman will know why I referred specifically to rural schools, as the issue was raised on several occasions by himself and by other members of the Committee. The press notice to which he is referring quotes my comments in Committee. The pledge applies not only to rural schools but to all schools, but the quotations in the press notice were in response to issues raised in Committee by himself and other members of the Committee.

Mr. Dorrell: That is perfectly true. However, the Minister made considerable play in Committee of the pledge of extra money, which was to be focused on recruiting extra teachers, to ensure that the choice of parents was respected. In his comments both to the Committee and in the press release, the Minister focused that pledge directly on rural schools.
I look forward to hearing in the Minister's reply to the debate whether he is saying that there will be special protection and assistance to deal with issues in rural schools—which was the implication of his comments to the Committee and of his press release—or whether he is saying that the same principles will apply to schools, regardless of whether they are in a rural or urban community. That is an important issue, and I hope that he will address it directly in his reply.
The press release makes another point, on which I shall conclude:
This is a popular policy which the Government intends will be delivered in a way which enhances parental preference.
The statement that it is a popular policy designed to enhance parental preference is a form of newspeak of which George Orwell would have been proud. It is simply nonsense to say that the principle is being introduced and that it will have the effect of enhancing parental preference. The reality is that it is a constraint on parental preference and it was always intended to be a constraint on parental preference.

Dr. George Turner: indicated dissent.

Mr. Dorrell: The hon. Gentleman shakes his head, but I shall willingly give way to him if he can explain how a limit on class size and a refusal to accept a 31st child into a class, although that may reflect the parents' preference, enhances parental preference. How does it enhance parental preference to deny parents the opportunity to put their child into the 31st place, if that is their choice and if the head teacher believes that it is consistent with the educational interests both of the 31st child and of the other 30? How does the removal of that opportunity enhance parental choice? If the hon. Gentleman wishes to argue that case, I shall give way.

Dr. Turner: During our long debates in Committee, my hon. Friend the Minister made it clear that the Government were going to make sure that the initiative was properly funded and that where parental choice was


being thwarted—particularly in rural areas, by the distances that children who were the 31st child might have to travel—the Government were determined that funding would be made available properly to deliver our pledge. Will the right hon. Gentleman explain where his principled objection to a fixed figure sits, when his Government supported and enforced a fixed limit on every nursery class in the land? If his party can support a fixed limit of 26 in that respect, what is wrong with saying that a fixed limit should be observed in respect of other young children?

Mr. Dorrell: What I seek to do with the new clause is to respect the Government's electoral mandate for an infant class size of 30 and to suggest a formula whereby that can be made consistent with the other considerations which, in the real world, have to be taken into account when deciding which school an individual child is to attend. The reality, which the hon. Gentleman did not address, is that if one limits class size in all circumstances, one inhibits rather than enhances parental choice.
The Government's policy, given effect by the Bill, is that it is better for a child to be in a class of 29, in a neighbouring village rather than his or her own village, with an indifferent teacher, in a crumbling building and in a school of the wrong denomination, which was his or her parents' second-choice school, than to be in a class of 31, with an inspirational teacher, in a new building, in a school in his or her home village that is his or her parents' first-choice school and which is in the denomination of the church that the family attends. That is the Government's policy. It is no good Labour Back Benchers shaking their heads: that is the principle on which the Bill is based and the principle that will be translated into law if the Bill goes through unamended.
That is why I seek to introduce an element of flexibility into the provisions of the Bill, to give effect to what I believe should be the key principle in determining which school an individual child attends. That key principle is that, within the overall constraints of policy—I acknowledge the Government's right to do that—if the parent chooses a particular school and the head teacher accepts that that school represents the best opportunity for an individual child, if the parent is happy and the teacher is happy, it is not the Government's role to intervene and say that, even though they are happy, they should not be.

Dr. Turner: Will the right hon. Gentleman give way?

Mr. Dorrell: No, I have finished.

Dr. Turner: I tried in Committee—

Madam Speaker: Order.

Mrs. Theresa May: I am pleased to have an opportunity to speak in support of new clause 8. In Committee, we had a lengthy discussion about infant class sizes. It is important to echo the comments of my right hon. Friend the Member for Charnwood (Mr. Dorrell) in setting out the framework within which the new clause has been tabled. The Labour Government came to power last May having made a pledge that they would reduce infant class sizes. The figure given at the time was 30 and, although no figure appears on the face of the Bill, we understand that that is the figure which

Government will put in the relevant regulations. We accept that the Government came in with that pledge and want to put it into effect in the Bill.
In Committee, we discussed the practical issues involved in trying to implement that pledge at a local level. I hope that the Government will think again about the issues, because it is not just the Conservatives who are raising them—head teachers and others have raised them with me when I have visited infant, junior and primary schools in my constituency. They talk about the problem of putting into effect a pledge to have only 30 in every infant class when the resources may not be available to fund extra teachers and put up extra classrooms. As we know, not every local authority is being given resources initially to meet the pledge.
4.15 pm
In some schools, including some infant schools in my constituency, it is virtually impossible to find space on the site for the extra classroom that would be needed if the pledge were put into effect with an absolute limit of 30. In new clause 8, we suggest that it would be preferable to introduce flexibility, accepting a limit on class sizes, as my right hon. Friend the Member for Charnwood made clear to the hon. Member for Waveney (Mr. Blizzard), but providing a band within which a local authority may operate to allow for situations in which it is physically difficult to accommodate an extra classroom.
Our proposal would also enable extra flexibility on parental preference. I visited a school in my constituency on Monday morning. After a number of appeals went against the head teacher, she now has an infant class with 36 children. She is concerned about how the system will operate. Local education authorities will have to predict that they may have infant classes of more than 30 and put in a bid for funding to accommodate the extra teachers and classrooms that will be necessary. The Government will then decide whether the bid is appropriate, and the funds should be made available.
It is not always possible to predict when extra children will come to a school. If a number of parents move into a school catchment area during the year, the school may suddenly have more than the designated number of children, without the resources to cope with them. The local education authority will not have put in a prior bid and the extra resources to cater for extra classrooms and teachers will not be available. What will happen if the neighbouring schools also do not have room for the children? How will the local education authority cope?
The Minister was asked about that towards the end of the debate in Committee, when he brought back his proposals on funding. He did not answer the questions then. I hope that he will be able to do so now.
We are not suggesting that the Government throw away their pledge to limit infant class sizes. However, practical concerns remain—raised not just by Conservative Members, but by head teachers—about how that pledge can be put into effect, notwithstanding the Government's proposals on extra funding. There is concern about authorities that will not, in the first instance, receive extra funding. There is concern about whether the money available from the abolition of the assisted places scheme will be sufficient to accommodate the pledge in all the areas in which extra resources will be necessary—an argument of which the Minister will be very well aware.


There is concern that tensions will increase between parental choice of school and the Government's decision to limit infant class sizes. New clause 8 does not do away with the concept of a limit; it suggests a degree of flexibility in LEAs.

Mr. Blizzard: In setting, in effect, a class size limit of 35, would not the hon. Lady, by her own argument, then face the problem of the 36th child—if that is deemed to be a problem?

Mrs. May: If any limit is set, there can be the problem of the extra child. Flexibility in numbers provides greater ability to accommodate children and enables greater parental choice in an LEA. There would be flexibility because some schools may be under the limit, while others are over it. I fully accept that the hon. Gentleman's point brings into sharp focus the tension between parental preference and class size. We have always thought that parental preference should be given a high priority—although it cannot be met in every circumstance. By providing extra flexibility, parental preference will more likely be met.
The Minister has not fully addressed the issue that I and others raised in Committee concerning the soon-to-be LEA—following the demise of Berkshire county council on 1 April—in my constituency. It feels that some parents would prefer their child to be in a class of, say, 31 or 32, but where there was a classroom assistant as well as a teacher, so that contact time with the child was increased, rather than their child being in a class of 30 or 29 in which there was only a teacher. That is exactly the sharp choice described by my right hon. Friend the Member for Charnwood.
The Government are placing everything on the class size limit and not taking into account all the other factors, such as resources available to an LEA, space available on a school site, the teaching resource and the availability of classroom assistants, who can be extremely important in an infant class.
Such factors, together with parental preference, should be given a higher priority in the Bill, which provides simply a single limit on class size. I hope that the Government will be able not only to respond to the points raised but to look again at the possibility of introducing a degree of flexibility, which accepts the concept of a limit but provides leeway for LEAs to help meet practically parental preference and other issues.

Mr. Nick St. Aubyn: I sincerely believe that the Government's response to the new clause will be a good pointer to whether their interest in education derives from a genuine concern about improving the quality of education or from their electoral concern and a fascination with election slogans emanating from Millbank tower.
There can be no doubt that the pledge on classroom size was a very effective slogan; it worked very well for the Labour party. Now that Labour Members are the Government, they have to look at the reality. The reality is that not only Opposition Members but teachers, governors and parents are asking many questions about what the policy, strictly interpreted, will mean.
We support the goal of smaller class sizes. However, if the annual expenditure of £100 million alone—the Department has costed its policy at that amount—will

unlock the key to a better education system, I am sure that the previous Government would have found the money to pursue such a policy. We increased education spending by billions of pounds—not just by £100 million—and, in doing so, we improved the standards and the quality of education.
On the other hand, as reported in The Times Educational Supplement, the present Government's policy has led governors to predict a disaster if popular schools are required to expand out of control. I believe that the Minister has boxed himself in by pledging that no child will be forced to attend a failing school. That commitment has been latched onto as a way of forcing the most popular schools to grow even further. As The Times Educational Supplement points out, there are many reasons why a school is popular. One reason is that it has reached an optimum size. If the Minister forces such schools to grow even further, he will reduce standards in those and in other schools.
As I said, we are in favour of smaller class sizes, and the new clause seeks to ensure that such an objective is interpreted broadly. In Surrey, we have small class sizes—the average is under 27 per class. We have always devoted additional expenditure, over and above the standard spending assessment, to early years primary schools. Therefore, we are entirely sympathetic with the Government's objective.
The new clause seeks to introduce some flexibility so that in an authority area where the average class size is 27, individual schools may have an additional eight pupils in a class. It is not a question of coping with an additional single child, but of introducing the flexibility to deal with an additional eight children. That is surely a significant difference.
The school in the village where I live has two classes of just under 30 pupils. The school is growing—indeed, it needs to take on more children in order to survive and pay its way. If that school is to survive, classes may have to include a 31st or 32nd child. Parents prefer to send their children to the local village school rather than braving the peak-hour commuter traffic to take their children to schools in the neighbouring village or in the main town of Guildford. Parents do not make that choice, because it would not be good for their children: it is better for children to be educated with their friends in the village where they are growing up. As a result of the Government's proposals, parents will no longer have that choice.
The bias towards smaller class sizes is based on research, but that research also shows clearly that only a significant drop in class size has an impact on educational achievement. No researcher in this area has proved that small variations in class size have any significant impact on the quality of education provided. The environment in which the child learns and the quality of teaching are far more important.
Curiously, during the passage of education Bills introduced by the previous Government, the present Ministers were the first to warn of "the dead hand" of bureaucracy, to use the words of the Minister for School Standards. The Under-Secretary of State for Education and Employment said:
We must stop the infliction on schools and children of a bureaucracy that will do no good to anybody."—[Official Report, 9 November 1992; Vol. 213, c. 687.]


Yet the imposition of the rigid limit of 30 per class will impose a bureaucracy that will do "no good to anybody".
On the other hand, the wider objective in the new clause would mean that the benefit of lower class sizes could feed through, but without the damage that the Government's policy would inflict.

Mr. Graham Brady: Thank you for calling me to speak, Mr. Deputy Speaker. We seem to be working in synchronicity and I hope that I will continue to be in tune with your wishes as I speak briefly in support of the new clause.
I am pleased to follow my hon. Friends in commending new clause 8. Many of the hon. Members present have just finished considering the Bill in the Standing Committee and I think that most would agree that it was an exemplary Committee in that it was constructive and Opposition Members did their best to help Ministers to arrive at better legislation.
The new clause is a classic example of how the Opposition are seeking again to assist Ministers and ensure that they avoid a damaging pitfall. The rigidity and inflexibility that the Bill would enshrine in law would cause the Government major problems, as they would be held responsible for the chaos that would ensue. There would also be problems for local authorities and schools throughout the country.
More important, the Bill would impose enormous problems on parents, who would lose an element of choice. Their choices and decisions would be limited and restricted by the legislation, and their choice of school would be narrower. In many areas, there would be difficulties in meeting parents' educational requirements.
Our suggested new clause would provide the discipline that the Government reasonably seek to introduce in requiring an average class size of a certain level and it would certainly enshrine in law the principle of aiming for lower class sizes. It would also allow some flexibility, which would be a major improvement and would help the Government to avoid some of the embarrassing difficulties that they face in the years ahead if they do not accept it.
My right hon. Friend the Member for Charnwood (Mr. Dorrell) referred to some of the difficulties that would arise with the Government's inflexible proposals, such as difficulties with siblings and for people with a preference for denominational education in Church schools, which could not be met because of rigid class size limits. The Government must bear in mind the fact that for many parents the most important factor in deciding where their child should go to school is its religious character. No Government should have a right to ride roughshod over that choice and deny parents the freedom to choose a denominational education. The Bill risks doing so.
For many parents, it is important that their children should be able to attend their local school. Often, it is a matter of practicality for the family, especially when both parents work. In that case, it can be vital to send children to a school close to home.
While the Minister may have given some serious reassurance to rural schools—we wait to hear whether that is the case—as a Member representing a suburban

constituency, I must press him further on the criteria that he would apply in allowing extra funding to popular schools in urban and suburban areas that reach the class size limit. It is not good enough merely to say that a school that feels that it may reach or breach the limit would be able to apply for a grant to increase the size of its premises and the number of teaching staff to accommodate the extra need. We need to know what criteria will be used, and whether a popular school in a suburban or urban area will always be given the funds promptly to allow for expansion to meet parental choice.
As Labour Members who served in Committee will know, I represent an area which is fortunate in the quality of its schools. I am most concerned about the impact of the Government's proposals on popular schools—I am in the fortunate position of having to defend the popularity of the schools in my area, which attract many applications from outside their catchment areas and even the borough boundary. Any reduction in the choice that is available to parents who live just over the boundary in the Manchester metropolitan borough council area—they are not my constituents—is a serious threat, which would be to their detriment.
The Bill is flawed; it betrays an arrogant belief that the Government know better than parents how to choose schools for children, and better than schools and local authorities what is right for children. It puts ahead of parental choice and responsibility the notion that Ministers should set public priorities that will apply throughout the country, regardless of particular circumstances. The new clause would improve the Bill and it would help the Government to avoid embarrassing difficulties in the future. I very much hope that the Minister will accept it.

Mr. William Cash: What my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) has said is entirely consistent with reality. The recent league tables show that Cheshire and Staffordshire are two of the counties that achieved tremendous school results. There is a remarkable symmetry between what has been going on in those counties, which are, to a great extent, rural counties.
From time to time, I have had to fight very hard within the Staffordshire county council educational framework to ensure that the rural schools in my constituency have been sustained. Indeed, I pay tribute to the county council, which has pursued a policy of ensuring that rural schools survive, even though they may have class sizes well below the numbers that are being promulgated at the moment. Such schools perform an immensely important function in sustaining the rural community. It is not realistic to set arbitrary limits that will prevent rural schools, particularly infant schools, from surviving.
I thoroughly support new clause 8, which would guarantee arrangements to ensure the preservation of schools that should be preserved. The Government are in power largely as a result of the support—which I think was misconceived, as the Bill betrays—that they received from people in rural areas in the general election last year. If the Government want to maintain that support, they should listen to the arguments that are being advanced by Conservative Members.
Rural schools are vital to a community's sense of identity, as was demonstrated by the Countryside Alliance only 10 days ago. Although the alliance's main objectives concerned other questions relating to rural areas, schools are fundamental to rural communities.
It is essential that we ensure the survival of rural schools, even if they are undersized. I hope that the Minister will show due regard to the significance of those schools, and ensure that the Bill's measures will do nothing that would lead to their being closed. If the Government make a mistake on this, they will pay the price in the ballot box.

Mr. Willis: I am grateful to the hon. Gentleman, or is it the right hon. Gentleman?

Mr. Cash: Certainly not.

Mr. Willis: It was a Freudian slip. The hon. Gentleman's day will come. I listened carefully to what the hon. Gentleman said. Why, during the lifetime of the last Conservative Government, were more than 450 small rural primary schools closed? That was unprecedented. More were closed under the previous Government than under any Government since the war. Is there a response to that?

Mr. Cash: The short answer is that I said that I was not always right. I do not believe that I ever am. Part of the argument was that there was a problem, and many rural schools were closed under the previous Administration.
The argument that I address to the new Government, because they are the Government, is that they should have regard to the importance of sustaining the rural communities. It is essential that rural schools are maintained. It does not matter what happened in the past. The key question now is what the present Government intend to do about it. Rural schools must be sustained, even if they appear to be undersized. If the rural communities are at stake, I look to the Government to respond.

Mr. Byers: I shall be asking the House to accept Government amendments Nos. 79 and 80. As the hon. Member for Stone (Mr. Cash) said, we discussed similar amendments in Committee. My recollection is the same as that of the hon. Member for Harrogate and Knaresborough (Mr. Willis). The hon. Member for Bath (Mr. Foster) moved an amendment to change "may" to "shall". Parliamentary counsel has had an opportunity to examine the important drafting issues raised by those two amendments and has agreed that is appropriate to change "shall" to "may". That is all that amendments Nos. 79 and 80 do.
Amendment No. 79 imposes a limit on class sizes and places a duty on the Secretary of State to limit them. Amendment No. 80 says that the Secretary of State "shall" pay grant for the purposes of reducing class size.
I hope that all hon. Members will be able to accept the two Government amendments, which reflect a discussion in Committee in which there was broad agreement. I am pleased that we can start off the Report stage on something that the whole House can accept and that we can reflect the positive spirit of the proceedings in Committee. That is probably as far as it goes; I shall be asking the House to reject new clause 8.
Before I come on to the detail of the new clause, may I say that I listened carefully to the points made to the hon. Member for Stone, who has been a doughty campaigner for schools in Staffordshire for many years. Some exciting work is going on in Staffordshire to harness new technology to benefit rural schools. We can build on that nationally. It will enable children attending rural primary schools to have a breadth of education experience which, in days gone by, might have been denied to them. New technology will provide the opportunity of a good standard of education to children in schools in Staffordshire and throughout the country.
I hope that, later tonight, we shall discuss new clause 13, which deals specifically with protecting rural schools threatened with closure. Hon. Members were right to raise concerns about the effect of class size policy on rural infant schools in particular. If it is handled badly, it may also affect schools in built-up and urban areas. I shall go through the steps that the Government intend to take and the safeguards that we shall put in place to make sure that the difficulties to which right hon. and hon. Members have referred simply will not occur.
Before I deal with the Government's approach, I shall say a few words about new clause 8. The right hon. Member for Charnwood (Mr. Dorrell) said that a degree of flexibility with regard to class size was vital. The flexibility provided by the new clause would allow larger classes—up to 35—with all the problems that have been mentioned. The intervention by my hon. Friend the Member for Waveney (Mr. Blizzard) made the point well; any cut-off may create difficulties. Whether the limit is 35 or 30, we must put in place safeguards and mechanisms that ensure that we do not create difficulties such as the denial of parental preference, which has been referred to during this short debate.
We recognise that class size is not the only factor affecting good quality education. The class can be small, but if the teacher is bad and poorly prepared, the quality of education will not be satisfactory. We need to take steps to ensure that we have good teachers in every class in every school.
A good teacher will be helped by a smaller class size. That is why we need a combination of policies. It is not merely a matter of saying that we want to raise standards and we will do that by reducing class size. That will not be enough. The reduction of class size policy must be seen alongside steps to improve teacher training, to provide greater access to literacy and numeracy materials in schools, and to improve the environment through our capital programme and the new deal for schools. All those measures will ensure that, in a variety of ways, we can drive up standards in our schools.
In that context, reducing class sizes in the infant years will play an important role. The number of five, six and seven-year-olds in classes of more than 30 has risen dramatically over recent years.

Mr. St. Aubyn: Will the Minister try to enlighten us by pointing to any research that suggests that the quality of teaching is improved if the class size is reduced from 31 to 30?

Mr. Byers: The hon. Gentleman was not listening. I did not say that a good teacher and larger or smaller


classes were mutually exclusive. The Government are committed to a many-faceted approach to raising standards, partly by reducing class size, and also through good quality teaching. The two must go together. I agreed with the right hon. Member for Charnwood that a range of issues need to be addressed. Class size is one factor which, we believe, makes an important impact on the quality of education provided in infant schools.
We want a national scheme, and we make no apology for that. We do not want local variations in class size. We were elected on a clear pledge of classes of no more than 30 for five, six and seven-year-olds by the end of this Parliament, and we are on course to deliver that pledge. It will not be subject to local variations, but will be a national scheme delivered through local partners—through schools, Churches and local education authorities. Working through those partners, we will be able to deliver the pledge.

Mr. Don Foster: The Minister is right to say that the Government pledged to introduce a national scheme to ensure that class sizes for five, six and seven-year-olds would be reduced to a maximum of 30. Will he confirm to the House what the Under-Secretary of State for Education and Employment, the hon. Member for Birmingham, Yardley (Ms Morris), told us in Committee—that, at a national level, there would be no possibility of schools meeting the class size pledge for key stage 1 by increasing class sizes for key stage 2, or in any other way damaging the education of key stage 2 pupils?

Mr. Byers: The attraction of the method that the Government are using to deliver the pledge is that the money is ring-fenced and cannot be used for any other purpose. By ring-fencing the resources by way of specific grant, we can guarantee that every penny that we redirect from the phasing out of the assisted places scheme will be used for the revenue spending to employ more teachers to meet the class size pledge. We will be able to deliver for five, six and seven-year-olds and, because we are providing additional resources, that should not have a consequence for seven, eight and nine-year-olds, as we are dealing with key stage 1.

Mr. Foster: The Minister has perhaps not been quite as robust in his response as the House would have liked. Will he give an absolute assurance that no school will be allowed to introduce the class size maximum of 30 for key stage 1 in a way that is to the detriment of pupils in key stage 2, either by increasing their class sizes or by any other method?

Mr. Byers: I am disappointed that I have not been robust enough in my response—I will have another go and I hope it will be better this time. Delivering the pledge will affect infant classes of five, six and seven-year-olds and we will provide the resources for that. There is no need, therefore, for children at key stage 2 to be affected adversely.
In Committee, my hon. Friend the Under-Secretary said—and I am happy to confirm—that we will monitor closely the way in which schools use the new regime and we will see how it affects key stage 2 pupils to make sure there are no adverse consequences. We will look carefully at the local management schemes—which the Secretary

of State approves—to make sure that no attempt is made to use money for key stage 1 by diverting resources away from key stage 2 pupils.

Mr. Dorrell: Is not the reason why the Minister cannot give the hon. Member for Bath (Mr. Foster) the assurance he seeks that, although he says it is the Government's intention specifically to grant the extra money to provide for five, six and seven-year-olds, the Government have no machinery for ring-fencing the budget that is not specifically granted—that is, the whole of the budget currently spent on those pupils? The Government can specifically grant, and therefore ring-fence, the extra money, but it is still open to a school or LEA to withdraw money currently used for five, six and seven-year-olds to use elsewhere. The implication of targeting in the Minister's remarks is something which the Government cannot deliver.

Mr. Byers: The right hon. Gentleman chose to ignore my final point, which was that there is a safeguard. All local schemes for management, and the delegation of budgets to schools, have to be approved by the Secretary of State. If, within that regime, a local authority seeks to divert resources from key stage 1 pupils—and uses the additional specific grant as an opportunity to do it—it will be thrown up as part of the local management scheme.
I can assure the right hon. Member for Charnwood that the Secretary of State will not approve a local management scheme that tries to achieve those objectives. In approving a local management scheme, the Secretary of State will be exercising a power inherited from the previous Administration, who gave Secretaries of State precisely that power.
Some play was made of the importance of religious education and the concerns that Catholic or Church of England schools might not be able to meet parental preference. I did not hear from the right hon. Member for Charnwood or any of his hon. Friends the views of the Church education authorities. The reason we did not hear their views is that the Church education authorities support the Government's policy on class size reductions.
There have been attempts to try to get the Church authorities to express concerns or reservations about the policy, but that has not happened because they fully support the Government's pledge to reduce infant class sizes. The Church authorities support the policy, which they know will be implemented in a way which takes account of their concerns and views. That is why it is important to deliver the pledge through the LEAs, the Church authorities and the schools themselves.

Mrs. Angela Browning: rose—

Mr. Byers: We will not wait until the end of this Parliament, which was the pledge—we will start delivering from this September. We will start in constituencies in Devon—such as that of the hon. Member for Tiverton and Honiton (Mrs. Browning)—where we


will spend £1 million from this September on reducing class sizes for 6,100 five, six and seven-year-olds. I hope that she will welcome the Government's action.

Mrs. Browning: If the governing body of a Church school had any concern about numbers—for example, the 31st child, siblings and so on—is it correct that the Church authority would have a veto on the matter?

Mr. Byers: It will be for the admissions authority to trigger the additional resource that would follow on from the 31st child. We made the point in Committee that, whether it is a rural school or a popular school, we will take steps to ensure that if there is a 31st child, additional resources will follow to ensure that parental preference is not denied. The additional teacher will be made available. Therefore, the school will be able to ensure that the class will have 30 or fewer children. That will apply across the board, not just in rural areas. We made it clear in Committee that we will ensure that the pledge is delivered in a way that is sensitive to parental preference. That is exactly how we intend to do it.

Mrs. Browning: rose—

Mr. Byers: I shall give way once more, but then I must make progress.

Mrs. Browning: I am sorry to press the Minister, but it is important. Is it the case that, in such a circumstance, Church authorities have not been promised a veto? I shall be grateful for a specific answer to that question.

Mr. Byers: No one has been promised a veto on anything. That would be inappropriate. I hope that that answer satisfies the hon. Lady.
We have sought to work with the education service, and we intend to do that. As a result of our class size pledge and the way in which we intend to target resources, we can reduce class sizes and meet parental preference, which was not the case under the regime that we inherited from the previous Government. We are taking steps to ensure that we can do that not just for rural schools but for urban schools that might be popular and offer high standards. They will have the opportunity to reduce their class sizes.
The new clause seeks to deny hundreds of thousands of children in our country the benefit of the pledge that the Government made to the electorate in the run-up to the election on 1 May. We intend to ensure that we will deliver on our pledge.
The flexibility that the right hon. Member for Charnwood seeks to introduce is for higher class sizes. We reject that. We recognise the value of class size and the crucial part that it will play in driving up standards in our schools. We intend to deliver on our pledge, not from the end of this Parliament but from September of this year. Some 120,000 five, six and seven-year-olds will benefit from this September. By the end of this Parliament, 500,000 five, six and seven-year-olds will benefit because of the Government's commitment.
The new clause is destructive. It will deny those opportunities, which is why I urge the House to vote against it.

Mr. Dorrell: The Minister has responded to none of the concerns that I expressed. It remains the Government's position that it is more important to be in a class of 29, in a second-choice school, with a newly qualified teacher. In the Government's view, that is a better set of circumstances than to be in a class of 31, with an inspirational teacher, in one's school of first choice, in gleaming new buildings. That is not the experience of the overwhelming majority of Britain's parents. That is why we shall press the new clause to a vote.

Question put, That the clause be read a Second time:—

The House divided: Ayes 130, Noes 333.

Division No. 198]
[4.58 pm


AYES


Amess, David
Heald, Oliver


Ancram, Rt Hon Michael
Heathcoat-Amory, Rt Hon David


Arbuthnot, James
Horam, John


Atkinson, David (Bour'mth E)
Howard, Rt Hon Michael


Atkinson, Peter (Hexham)
Howarth, Gerald (Aldershot)


Bercow, John
Hunter, Andrew


Beresford, Sir Paul
Jack, Rt Hon Michael


Boswell, Tim
Jackson, Robert (Wantage)


Bottomley, Peter (Worthing W)
Jenkin, Bernard


Brady, Graham
Johnson Smith, Rt Hon Sir Geoffrey


Brazier, Julian



Brooke, Rt Hon Peter
Key, Robert


Browning, Mrs Angela
Kirkbride, Miss Julie


Bruce, Ian (S Dorset)
Laing, Mrs Eleanor


Burns, Simon
Lait, Mrs Jacqui


Butterfill, John
Lansley, Andrew


Cash, William
Leigh, Edward


Chapman, Sir Sydney (Chipping Barnet)
Letwin, Oliver



Lewis, Dr Julian (New Forest E)


Clappison, James
Lidington, David


Clark, Dr Michael (Rayleigh)
Lilley, Rt Hon Peter


Clarke, Rt Hon Kenneth (Rushcliffe)
Lloyd, Rt Hon Sir Peter (Fareham)



Luff, Peter


Clifton-Brown, Geoffrey
Lyell, Rt Hon Sir Nicholas


Collins, Tim
MacGregor, Rt Hon John


Cormack, Sir Patrick
MacKay, Andrew


Curry, Rt Hon David
Maclean, Rt Hon David


Davies, Quentin (Grantham)
McLoughlin, Patrick


Davis, Rt Hon David (Haltemprice)
Maples, John


Day, Stephen
Maude, Rt Hon Francis


Dorrell, Rt Hon Stephen
Mawhinney, Rt Hon Sir Brian


Duncan, Alan
May, Mrs Theresa


Duncan Smith, Iain
Moss, Malcolm


Evans, Nigel
Nicholls, Patrick


Faber, David
Norman, Archie


Fallon, Michael
Ottaway, Richard


Forth, Rt Hon Eric
Page, Richard


Fowler, Rt Hon Sir Norman
Paice, James


Fox, Dr Liam
Pickles, Eric


Garnier, Edward
Prior, David


Gibb, Nick
Randall, John


Gill, Christopher
Redwood, Rt Hon John


Gillan, Mrs Cheryl
Robathan, Andrew


Goodlad, Rt Hon Sir Alastair
Robertson, Laurence (Tewk'b'ry)


Gorman, Mrs Teresa
Roe, Mrs Marion (Broxbourne)


Gray, James
Rowe, Andrew (Faversham)


Greenway, John
Ruffley, David


Grieve, Dominic
St Aubyn, Nick


Hague, Rt Hon William
Sayeed, Jonathan


Hamilton, Rt Hon Sir Archie
Shephard, Rt Hon Mrs Gillian


Hammond, Philip
Shepherd, Richard


Hawkins, Nick
Simpson, Keith (Mid-Norfolk)


Hayes, John
Soames, Nicholas






Spicer, Sir Michael
Waterson, Nigel


Spring, Richard
Wells, Bowen


Streeter, Gary
Whitney, Sir Raymond


Swayne, Desmond
Whittingdale, John


Syms, Robert
Widdecombe, Rt Hon Miss Ann


Tapsell, Sir Peter
Wilkinson, John


Taylor, Ian (Esher & Walton)
Willetts, David


Taylor, John M (Solihull)
Winterton, Mrs Ann (Congleton)


Taylor, Sir Teddy
Winterton, Nicholas (Macclesfield)


Townend, John
Woodward, Shaun


Trend, Michael
Yeo, Tim


Tyrie, Andrew
Young, Rt Hon Sir George


Viggers, Peter



Walter, Robert
Tellers for the Ayes:


Wardle, Charles
Sir David Madel and



Mr. James Cran.


NOES


Ainger, Nick
Clark, Rt Hon Dr David (S Shields)


Ainsworth, Robert (Cov'try NE)
Clark, Dr Lynda (Edinburgh Pentlands)


Alexander, Douglas



Allan, Richard
Clark, Paul (Gillingham)


Allen, Graham
Clarke, Tony (Northampton S)


Anderson, Janet (Rossendale)
Clelland, David


Armstrong, Ms Hilary
Coaker, Vernon


Ashdown, Rt Hon Paddy
Coffey, Ms Ann


Ashton, Joe
Colman, Tony


Austin, John
Connarty, Michael


Baker, Norman
Cook, Frank (Stockton N)


Ballard, Mrs Jackie
Corbett, Robin


Barnes, Harry
Corbyn, Jeremy


Battle, John
Cotter, Brian


Beard, Nigel
Cox, Tom


Beggs, Roy
Cranston, Ross


Bell, Stuart (Middlesbrough)
Crausby, David


Bennett, Andrew F
Cryer, Mrs Ann (Keighley)


Benton, Joe
Cryer, John (Hornchurch)


Berry, Roger
Cummings, John


Best, Harold
Cunningham, Jim (Cov'try S)


Betts, Clive
Dafis, Cynog


Blackman, Liz
Dalyell, Tam


Blears, Ms Hazel
Darling, Rt Hon Alistair


Blizzard, Bob
Darvill, Keith


Boateng, Paul
Davey, Edward (Kingston)


Borrow, David
Davey, Valerie (Bristol W)


Bradley, Keith (Withington)
Davidson, Ian


Bradshaw, Ben
Davies, Rt Hon Denzil (Llanelli)


Brake, Tom
Davies, Geraint (Croydon C)


Brand, Dr Peter
Davies, Rt Hon Ron (Caerphilly)


Breed, Colin
Davis, Terry (B'ham Hodge H)


Brinton, Mrs Helen
Dawson, Hilton


Brown, Rt Hon Nick (Newcastle E)
Denham, John


Brown, Russell (Dumfries)
Dewar, Rt Hon Donald


Browne, Desmond
Dismore, Andrew


Bruce, Malcolm (Gordon)
Dobbin, Jim


Burden, Richard
Donaldson, Jeffrey


Burgon, Colin
Donohoe, Brian H


Burnett, John
Dowd, Jim


Burstow, Paul
Drew, David


Byers, Stephen
Drown, Ms Julia


Cable, Dr Vincent
Dunwoody, Mrs Gwyneth


Campbell, Alan (Tynemouth)
Eagle, Angela (Wallasey)


Campbell, Mrs Anne (C'bridge)
Eagle, Maria (L'pool Garston)


Campbell, Menzies (NE Fife)
Edwards, Huw


Campbell, Ronnie (Blyth V)
Efford, Clive


Canavan, Dennis
Ellman, Mrs Louise


Caplin, Ivor
Ennis, Jeff


Casale, Roger
Field, Rt Hon Frank


Caton, Martin
Fitzsimons, Lorna


Cawsey, Ian
Flint, Caroline


Chaytor, David
Flynn, Paul


Chidgey, David
Forsythe, Clifford


Church, Ms Judith
Foster, Don (Bath)


Clapham, Michael
Foster, Michael Jabez (Hastings)



Foster, Michael J (Worcester)



Fyfe, Maria





Gapes, Mike
McCabe, Steve


George, Andrew (St Ives)
McCafferty, Ms Chris


Gerrard, Neil
McCartney, Ian (Makerfield)


Gilroy, Mrs Linda
McDonagh, Siobhain


Godsiff, Roger
McDonnell, John


Goggins, Paul
McIsaac, Shona


Gordon, Mrs Eileen
McLeish, Henry


Gorrie, Donald
Maclennan, Rt Hon Robert


Griffiths, Jane (Reading E)
McNamara, Kevin


Griffiths, Nigel (Edinburgh S)
McNulty, Tony


Griffiths, Win (Bridgend)
MacShane, Denis


Gunnell, John
Mactaggart, Fiona


Hain, Peter
McWalter, Tony


Hall, Mike (Weaver Vale)
Maginnis, Ken


Hamilton, Fabian (Leeds NE)
Mallaber, Judy


Hancock, Mike
Mandelson, Peter


Hanson, David
Marek, Dr John


Harris, Dr Evan
Marsden, Paul (Shrewsbury)


Harvey, Nick
Marshall, Jim (Leicester S)


Hepburn, Stephen
Marshall-Andrews, Robert


Heppell, John
Meale, Alan


Hesford, Stephen
Merron, Gillian


Hewitt, Ms Patricia
Michael, Alun


Hill, Keith
Michie, Bill (Shef'ld Heeley)


Hinchliffe, David
Michie, Mrs Ray (Argyll & Bute)


Hoey, Kate
Milburn, Alan


Home Robertson, John
Miller, Andrew


Hoon, Geoffrey
Mitchell, Austin


Hope, Phil
Moonie, Dr Lewis


Hopkins, Kelvin
Moran, Ms Margaret


Howarth, George (Knowsley N)
Morgan, Rhodri (Cardiff W)


Hoyle, Lindsay
Morley, Elliot


Hughes, Simon (Southwark N)
Morris, Ms Estelle (B'ham Yardley)


Humble, Mrs Joan
Morris, Rt Hon John (Aberavon)


Hurst, Alan
Mountford, Kali


Hutton, John
Mowlam, Rt Hon Marjorie


Ingram, Adam
Mudie, George


Jackson, Ms Glenda (Hampstead)
Murphy, Denis (Wansbeck)


Jackson, Helen (Hillsborough)
Naysmith, Dr Doug


Jamieson, David
Norris, Dan


Jenkins, Brian
O'Brien, Bill (Normanton)


Johnson, Alan (Hull W & Hessle)
O'Brien, Mike (N Warks)


Johnson, Miss Melanie (Welwyn Hatfield)
O'Hara, Eddie



Olner, Bill


Jones, Helen (Warrington N)
Öpik, Lembit


Jones, Ieuan Wyn (Ynys Môn)
Palmer, Dr Nick


Jones, Ms Jenny (Wolverh'ton SW)
Pearson, Ian



Pendry, Tom


Jones, Jon Owen (Cardiff C)
Perham, Ms Linda


Jones, Dr Lynne (Selly Oak)
Pickthall, Colin


Jones, Nigel (Cheltenham)
Pike, Peter L


Jowell, Ms Tessa
Plaskitt, James


Keen, Ann (Brentford & Isleworth)
Pond, Chris


Keetch, Paul
Pope, Greg


Kelly, Ms Ruth
Pound, Stephen


Kennedy, Charles (Ross Skye)
Prentice, Ms Bridget (Lewisham E)


Kennedy, Jane (Wavertree)
Prentice, Gordon (Pendle)


Khabra, Piara S
Prescott, Rt Hon John


Kilfoyle, Peter
Primarolo, Dawn


King, Andy (Rugby & Kenilworth)
Prosser, Gwyn


King, Ms Oona (Bethnal Green)
Purchase, Ken


Kingham, Ms Tess
Quinn, Lawrie


Kirkwood, Archy
Radice, Giles


Kumar, Dr Ashok
Rammell, Bill


Lawrence, Ms Jackie
Rapson, Syd


Laxton, Bob
Reed, Andrew (Loughborough)


Leslie, Christopher
Reid, Dr John (Hamilton N)


Levitt, Tom
Rendel, David


Lewis, Ivan (Bury S)
Robertson, Rt Hon George (Hamilton S)


Liddell, Mrs Helen



Linton, Martin
Robinson, Geoffrey (Cov'try NW)


Livsey, Richard
Robinson, Peter (Belfast E)


Llwyd, Elfyn
Roche, Mrs Barbara


Lock, David
Rooker, Jeff


Love, Andrew
Rooney, Terry


McAvoy, Thomas
Ross, William (E Lond'y)






Rowlands, Ted
Taylor, Matthew (Truro)


Ruane, Chris
Temple-Morris, Peter


Ruddock, Ms Joan
Thomas, Gareth (Clwyd W)


Russell, Bob (Colchester)
Thomas, Gareth R (Harrow W)


Russell, Ms Christine (Chester)
Thompson, William


Ryan, Ms Joan
Timms, Stephen


Sanders, Adrian
Todd, Mark


Savidge, Malcolm
Touhig, Don


Sawford, Phil
Trimble, Rt Hon David


Sedgemore, Brian
Truswell, Paul


Shaw, Jonathan
Turner, Dennis (Wolverh'ton SE)


Sheerman, Barry
Turner, Dr Desmond (Kemptown)


Sheldon, Rt Hon Robert
Turner, Dr George (NW Norfolk)


Shipley, Ms Debra
Twigg, Stephen (Enfield)


Singh, Marsha
Tyler, Paul


Skinner, Dennis
Vis, Dr Rudi


Smith, Angela (Basildon)
Wallace, James


Smith, Miss Geraldine (Morecambe & Lunesdale)
Walley, Ms Joan



Wareing, Robert N


Smith, Jacqui (Redditch)
Webb, Steve


Smith, John (Glamorgan)
White, Brian


Smith, Sir Robert (W Ab'd'ns)
Wigley, Rt Hon Dafydd


Smyth, Rev Martin (Belfast S)
Williams, Rt Hon Alan (Swansea W)


Southworth, Ms Helen



Spellar, John
Williams, Alan W (E Carmarthen)


Squire, Ms Rachel
Williams, Mrs Betty (Conwy)


Starkey, Dr Phyllis
Willis, Phil


Steinberg, Gerry
Wills, Michael


Stevenson, George
Wilson, Brian


Stewart, Ian (Eccles)
Winnick, David


Stinchcombe, Paul
Winterton, Ms Rosie (Doncaster C)


Stoate, Dr Howard
Wise, Audrey


Strang, Rt Hon Dr Gavin
Wood, Mike


Straw, Rt Hon Jack
Woolas, Phil


Stringer, Graham
Wright, Dr Tony (Cannock)


Stuart, Ms Gisela



Sutcliffe, Gerry
Tellers for the Noes:


Taylor, Rt Hon Mrs Ann (Dewsbury)
Mr. John McFall and



Mr. Kevin Hughes.

Question accordingly negatived.

New clause 14

EDUCATION DEVELOPMENT PLAN

'Educational development plans shall contain a plan for Special Educational Needs, which shall outline:

(a) the mechanism by which the LEA identifies special needs within its area;
(b) how it intends to meet current legislation including requirements of codes of practice;
(c) appeals mechanisms; and
(d) how it will meet the statutory requirements of the statements process.'.—[Mrs. Browning.]

Brought up, and read the First time.

Mrs. Browning: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss new clause 20—Special educational needs—
'(1) The Education Act 1996 shall be amended as follows.
(2) In section 316 (Children with special educational needs normally to be educated in mainstream schools)
(a) for subsection (1) there shall be substituted—
Any person exercising function under this part in respect of a child with special educational needs who should be educated in school shall secure that the child is educated

in a school which is not a special school unless that is incompatible with the wishes of the parent and the needs and ascertainable wishes of the child.
(b) subsection (2) shall be omitted.'.

Mrs. Browning: New clause 14 would establish a clear obligation on local authorities to identify, in education development plans, areas of special educational needs for which they have responsibility. It is important that that is included in the plans. In Committee, we expressed our concern about the general principle of education development plans, but it would be unrealistic for us to assume that they will not be part of the Bill. From that starting point, we tabled new clause 14 for addition to the Bill.
Before Christmas, the House had an Adjournment debate on a Friday morning on the Government's policy on special educational needs, based on their consultation document, "Excellence for All Children: Meeting Special Educational Needs". It is clear from the document and the consultation, which has now concluded, that the Government intend to introduce changes to the range of policies that affect children with special educational needs. The Minister has said on other occasions that the Government's recommendations on any changes—which, I understand, will be available in the summer—will not be part of any primary legislation. It is, therefore, important that a local education authority's education development plan, which will be approved by the Secretary of State, should encompass its responsibilities for special educational needs.
As new clause 14 makes clear, it is important that local authorities outline the mechanism by which they identify special needs. Many LEAs are unable to say how many children with different types of disability they provide for, and it seems a sensible starting point to have a mechanism for identifying special educational needs and, more specifically, the variety of needs that they have to meet. It is also important that the provision made by LEAs meets current legislation. The Minister has made it clear that the SEN code of practice is likely to be changed—we do not object if it is improved—but it is incumbent on LEAs to show how they intend to comply with the current code of practice.
Appeals mechanisms are especially important to parents and details should also be included in LEAs' education development plans. LEAs should also include in their plans details of how they intend to meet the statutory requirements of the statementing process.
The Government's Green Paper summarises some of the changes that they anticipate will be made, possibly after the Bill has received Royal Assent. Four key points are set out on page 42 and we believe that they should be incorporated in education development plans. The Green Paper states:
A revised version of the SEN Code of Practice will be in place, preserving the principles and safeguards of the present Code, while simplifying procedures and keeping paperwork to a minimum.
There will be renewed emphasis on provision under the school-based stages of the Code of Practice, with support from LEAs and greater assurance for parents of effective intervention, particularly at stage 3.
The Government claim:
The result of these improvements will be that the proportion of children who need a statement will be moving towards 2 per cent.


I do not wish to rehearse the debate on statementing that I have previously had with the Minister—and will have again when she makes known the outcome of the consultation—but it is clear that the statementing process will be retained. It is, therefore, important that LEAs identify clearly in their education development plans how they will undertake the statementing process. The Green Paper also states:
The great majority of SEN assessments will be completed within the statutory timetable.
It is important that that requirement is included in the Bill.
The Green Paper states, on page 70:
The Government has a central responsibility for raising standards and promoting progress for all children, including those with SEN.
We do not disagree. That wording is almost identical to the explanatory notes in the Bill when it describes the responsibilities of LEAs to provide an education development plan for submission to the Secretary of State. The Bill states that education development plans are a statement of proposals for developing provision of education by raising the standards of education and improving the performance of schools. The two definitions are therefore compatible.
5.15 pm
It is fair to say that special educational needs were discussed only in passing as they were covered by clauses in the Bill. No section referred specifically to SEN and, although one or two amendments were debated in more detail, it is important that the Government recognise that, in legislating for the future, they should include consideration of special educational needs.
From the cases that Members of Parliament take up on behalf of children with special educational needs, it is clear that parents are often in dispute with their LEA over their child's statement or individual requirements. If more clarity can be achieved in making LEAs aware that they have to follow codes of practice and legislation, and submit their plans for doing so to Secretary of State for scrutiny, that can only assist parents and the Minister, especially when we learn the details of her proposals once the result of the consultation on the Green Paper is known. I hope that new clause 14 is non-controversial and that the Minister will accept it in the spirit in which it is tabled. I also hope that its main beneficiaries will be children with special educational needs.

Mr. Willis: Liberal Democrat Members support the comments of the hon. Member for Tiverton and Honiton (Mrs. Browning). If new clause 14 is pressed to a vote, we shall support her in the Lobby. I hope that it will not be pressed, because I trust that the Minister supports most of what the hon. Lady said.
I begin my remarks on new clause 20 by praising the previous Government. It is unusual to hear such praise in the House, but there have been remarkable advances in working with children with special educational needs over the past 20 years, particularly since the Education Act 1981. It is difficult to think that, 20-odd years ago, we categorised young people in terms of their disabilities for the whole of their school lives. Worse, some children were categorised as incapable of being educated. It is important to put on record the fact that we have come a long way in addressing the problems of teaching children

with special educational needs and including them in our education system. I am sure that the Minister supports those comments.
We owe Baroness Warnock and her committee a tremendous debt of gratitude for the work that was done in producing their report. The 1981 Act did not bring about all that we wanted to result from the report, but it put into legislation the requirement for local education authorities and schools to meet more effectively their responsibilities to children with special needs. Subsequent legislation and, in particular, the code of practice have embedded good practice towards children with special educational needs in our education system. New clause 20, and new clause 14, would further embed good practice in legislation.
The number of statemented children who are in mainstream education has risen to 134,000, which is remarkable. Another achievement in which the previous Government played a part is the doubling since 1991 of the number of statemented children in mainstream schools.
Unfortunately, there has been no corresponding decline in the number of children in special schools. There is a feeling that having statemented children in mainstream schools has caused a decline in special schools and the number of places in them. Several hon. Members, such as the hon. Member for Maidenhead (Mrs. May), have pleaded strongly for the retention of special school provision. Although the number of statemented children in mainstream schools doubled in the 1990s, the number of children in special schools has remained constant at 98,000.
I want more children to be educated not in special schools, but in mainstream schools wherever possible, and the new clause deals with that matter.

Mr. Gerry Steinberg: Is the hon. Gentleman aware that Baroness Warnock told the Select Committee on Education and Employment during the previous Parliament that her suggestion of total integration had gone a little too far, and that she had changed her mind slightly?
Does the hon. Gentleman agree that so many statements have been issued over the past few years because parents, particularly vociferous middle-class parents, have realised that statementing is a good way to ensure that resources are directed to their child, and have pushed for statementing? When I was head of a special school, it was difficult to get parents to agree to statementing, because they believed that their child would be stigmatised by it. The increase in statementing is a reason for the decrease in the number of special school places.

Mr. Willis: I agree with both of the hon. Gentleman's points. I have never supported 100 per cent. integration, and do not believe that the Warnock committee meant it to come about, because mainstream education will never be appropriate for some children. I agree that more statements have been issued because of middle-class pressure, which has been the case in my local education authority, but I would like to think that the increase also came about because parents want the best for their children. I do not blame parents for using the system to help them.
The number of statemented children who are educated in mainstream schools differs between LEAs. In some, less than 0.5 per cent. of statemented children are


educated in mainstream schools, but in others, the figure is as much as 2 per cent. There are stark differences between individual schools. At John Smeaton school in Leeds, where I worked before being elected to the House, 5 per cent. of the 1,600 children had statements of special educational needs, and a further 220 were on level 3 of the code of practice, which is a significant number. We offered specialist provision, particularly to children with severe learning difficulties, and a facility to children with visual impairments. There was a feeling that many schools copped out and encouraged parents to ask my school to admit their children rather than fight for places at local schools which, in many cases, could have provided for the children equally well.
I recommend to hon. Members recent research carried out by Mel Ainscow of the university of Manchester, Tony Booth of the Open university, and Alan Dyson of Newcastle university, which shows the advantages that can be gained by children with special educational needs who are educated with their peers. Education is more than learning skills and acquiring knowledge; it is about developing and changing pupils' attitudes and behaviour towards each other, and evidence shows that inclusive education is the greatest force for such development.
At one school in Cleveland, I worked on the integration of children with physical impairments. A thalidomide child named Ricky Corner came to the school. He had no arms, and wrote with his foot. At first, that was a great cause of amusement and embarrassment to staff and students, but having him at the school was a great advantage, and the memory of the great joy and the understanding of his problem that he brought to his peer group and to staff has remained with me for many years.
It is a great pity that the Secretary of State is not here, because, seven or eight years ago, we had the pleasure of undertaking pioneering work with children who were totally blind and coming into a mainstream set-up. Mark Lister, who was from an incredibly disadvantaged family with immense social problems, came into my school in Leeds. Several years later, that young man went to Keele university to read for a law degree. He had a long-distance relationship with a girl in Poland, and is now married with a child. He spent all his time in a busy and difficult mainstream setting.
Thousands of examples could be given to illustrate why the Government should accept the new clause, and make inclusive education a pillar of the structure of raising standards. For parents, there is the immense satisfaction of having their children taught in mainstream education. There is no doubt that, although some parents still prefer their children to be educated in special schools—often for "protectionist" reasons—the vast majority aspire for their children to be educated alongside not just their peers but, if possible, children who live in the same street. That should be the ideal.
5.30 pm
In many ways, the barrier to the development of an inclusive education system is attitude—not legislation, and, if I may say so, not even resources. However, the Education Act 1981 gave local education authorities and schools an opt-out by making integration subject to an efficiency clause. Sadly, that has been used all too readily to deny children access to mainstream education.
The new clause is intended to make the Government's position and intention clear. It is intended to make it clear that all children should be given the opportunity to be taught in mainstream education, unless that is incompatible with the wishes of parents and the needs and ascertainable wishes of the children. The new clause does not fetter parents' right to send their children to special schools if that is considered best; nor does it give parents an unfettered right to send their children to the school of their choice. Parents would still be subject to the schedules of the Education Act 1996.
What the new clause does is provide an entitlement for every child in the country to a mainstream place, and tell every local education authority, every education action zone and every school to plan their resources accordingly.

Mrs. May: I support the new clause, and hope that, given the spirit in which it was moved, the Government will look favourably on it. It sends a clear message about the importance that we all attach to special educational needs, and about our view that every local education authority should include SEN as a natural part of its consideration of the development of education in its area.
As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, when we discussed educational development plans in Committee, valid questions were raised about whether they were appropriate. As the Government want to press ahead with such plans, however, I think it important to send a clear message that it is not simply a question of developing standards and performance targets that relate only to mainstream schools. The Bill should specify that the same criteria will relate to special educational needs, whether they are catered for by special schools or by mainstream provision. If the Government accepted the new clause, they would, indeed, send a clear message about the importance of LEAs' including SEN in their plans.
We have already discussed the question of special schools versus mainstream education for children with special needs. The hon. Member for Harrogate and Knaresborough (Mr. Willis) mentioned that debate and, indeed, made a passing reference to my contribution. The topic is important, and I am glad that it will be focused on, but we need to think carefully about what should be done. I am interested by new clause 20, tabled by the hon. Member for Harrogate and Knaresborough. In the document entitled "Excellence for All Children"—I hesitate to say whether it is a White Paper or a Green Paper, because I always seem to get it wrong—

The Parliamentary Under-Secretary of State for Education and Employment (Ms Estelle Morris): Green.

Mrs. May: I thank the Minister for correcting me from a sedentary position.
In that Green Paper, the Government presented their vision of an inclusive policy for children with special educational needs. I am sure that we all agree about the importance of ceasing to assume—it has been assumed in the past, but in recent years our attitude has changed—that the only way in which to teach a child with SEN is to send that child to a special school. We must accept that mainstream education is beneficial where it is possible, and where it is right for the child concerned.
I must, however, add a word of caution. I do not want a policy of inclusion to become a mantra, followed purely for the sake of it. We must recognise not only the requirements of children with SEN, but the requirements of other children in the mainstream class and, indeed, the rest of the school.
The hon. Member for Harrogate and Knaresborough spoke of the benefits that could result from educating disabled children in the mainstream system. I have seen those benefits myself. I was a governor of a primary school to which a blind child was brought. My example is similar to that given by the hon. Gentleman. The parents were clear about their wish for the child to be educated in the local primary school, and extra resources were provided to enable that to happen.
I well remember the meeting of the governing body at which the head teacher listed the benefits that had been gained not only by the child who had been able to be educated among his peers, but by the other children who had been able to relate to him. Attitudes had changed. Earlier this week, I talked to another head teacher in a school in my constituency. She told me that, when a child in a wheelchair was introduced to mainstream education, a change took place in the other children. Instead of saying, "Here comes the girl in a wheelchair", they said, "Here comes Melanie". They recognised the person. We cannot overestimate the change in attitudes and the benefit to other children, which will stay with them for the rest of their lives. We should not shy away from it.
Having said that, I must add that there are some children with SEN for whom inclusion in a mainstream class is not appropriate. The inclusion of some children would cause great difficulty for the rest of the class. Such circumstances are most likely to apply to children with particular behavioural difficulties, who would be disruptive. It might be difficult for teachers to cope with such children; or they might receive the bulk of the teacher's attention, while the others failed to be given the attention that they needed and deserved. While recognising the benefits of mainstream education, we must also recognise that what is right for the child and the school must be taken into account in any decision.
It is a delicate balance. We do not want head teachers simply to say that they will not take a particular child with special needs, because they think that it will be difficult to cope with that child in the classroom, and to shut that child out. We want to ensure that the right attitudes are taken, and that inclusion is possible where it is right. I continue to believe, however, that special schools will always be needed for some children. We should not give the impression that we do not think that they are appropriate for anyone. A balance must struck in assessing the specific needs of every child, to determine what is right in each child's circumstances.
I am very pleased that my hon. Friend the Member for Tiverton and Honiton has moved new clause 14. Special educational needs provision should be clearly dealt with in the Bill, clearly stating that local education authorities must not sweep SEN to the side or believe that it is a secondary consideration. SEN must be part of their work in developing educational development plans for their area. It must be natural for local education authorities to consider, as part of their process of developing education, how they will provide for SEN and how they will develop that provision.
My caveats on the inclusive policy proposed in new clause 20 are based on my belief that LEAs should be required in the Bill to give equal consideration to special educational needs, which should be part of their education development plans. I hope that the Government will accept new clause 14 in the spirit in which it was moved.

Mr. Gerald Howarth: I agree entirely with the comments made by my hon. Friend the Member for Maidenhead (Mrs. May), especially her comments on the importance of spelling out in the Bill the importance of special educational needs and of striking the right balance between mainstream and special schools. I strongly support both new clause 14 and new clause 20, as they would add considerably to the Bill. As my hon. Friend said, they would also send a clear message that education authorities must explicitly consider special educational needs.
In my previous constituency, I had experience of a school for dyslexic children, which was in the independent sector, and was greatly concerned to learn of the many cases in which parents struggled to obtain the right education for their child. So often, some education authorities refused point-blank to accept that a dyslexic child had a special educational need, although an independent school could have met that need. Although some authorities—curiously, they were Labour-controlled authorities, such as Derbyshire—were strongly supportive and realised that a certain school could meet a child's needs, other authorities were not supportive.
Local education authorities too often feel that they can cope within their own boundaries with almost any difficulty that a child may face, but they cannot. I wish that local education authorities would own up to the fact that they cannot possibly meet every special educational need, as children may have one of many difficulties.
I should like there to be much greater co-ordination between local education authorities so that, although they cannot provide for every special educational need, they can join other authorities in providing and rationalising special provision for children. That would not only relieve them from thinking that they must make all provision within their boundaries, but greatly extend provision by producing economies of scale. Consequently, special schools in the maintained sector could attract children from a wider area and become viable, as counties would not be competing with one another.
My own constituency is in the extreme north-east of Hampshire and abuts Surrey. For some of my constituents, the closest special educational need provision in Hampshire is 10 or 20 miles to the west, whereas precisely the right provision is available only a couple of miles away, just across the border in Surrey. However, Hampshire county council says, "That school would not be appropriate for that child, and we are not prepared to make an out-of-county placement." I therefore hope that the Minister will use her persuasive powers on local education authorities, so that they realise the benefit of rationalisation, which I am sure is the answer.
5.45 pm
I hope that the Minister also appreciates the points made by the hon. Member for Harrogate and Knaresborough (Mr. Willis) on the role and importance of special schools. There are, of course, advantages in


educating children in mainstream schools, not only for children with special educational needs, but for those without such needs. Children with special educational needs in mainstream schools do not feel that they have been separated from other children. However, I agree whole-heartedly with the hon. Gentleman that there is a case for children being educated with their peers if he means that those with a specific disability benefit by being educated with others with a similar disability.
At Maple Hayes hall, which is a school for dyslexic children in my previous constituency, I met children who had behavioural difficulties. I met one child who, at his previous school in Essex, had stabbed a Biro through the hand of the child next to him. The act was attributed to behavioural difficulties, but that was wrong. He was expressing frustration because his special educational needs were not being met. Fortunately, he was able subsequently to attend Maple Hayes hall. He told me, "This place saved me. If I hadn't come here, I probably would have ended up in prison."
I therefore believe that there is a case for children with some special educational needs to be educated together. They would not have to explain anything to their peers, and would derive enormous self-confidence by being with others with a similar disability.
I hope that the Minister will listen to the case that has been made—almost by both sides of the House—for passing the new clauses. The hon. Member for City of Durham (Mr. Steinberg) made an interesting and useful speech. Including the new clauses in the Bill would send a clear signal that, although educating children in mainstream education is preferable, there is a very strong case—educationally and socially—for encouraging schools that provide for specific educational needs.

Mr. St. Aubyn: I support new clause 14. The hon. Member for Harrogate and Knaresborough (Mr. Willis) generously commented on how greatly knowledge and understanding of special educational needs have increased in the past 20 years—the truth of which is undoubtedly reflected in the emphasis that we are giving to the subject in this debate and have given in other debates in the House in recent months.
The hon. Member for City of Durham (Mr. Steinberg) adopted a rather tired and old-fashioned agenda in his concern about which element in society has benefited most from the attention that has been given to special educational needs. It was inevitable that, as awareness has grown of what can be done to improve the performance of children with SEN, some sections of society have become more aware of those needs than others. Although, hitherto, middle-class families may have benefited more from the resources given to special educational needs, those benefits can be extended to all families.
It is negative to imply—as Labour Members have occasionally in our debates on the subject—that expenditure on SEN is a middle-class fix and the result of special pleading by middle-class parents for an extra share of the education cake. That is not the case at all: the children have a genuine need and we have to recognise it.
The situation would be improved if new clause 14 were implemented, because in the course of agreeing education plans with local authorities, a wider awareness of best

practice could be generated. If plans were discussed with a particular focus on special educational needs, there is no doubt that the success stories would spread to other areas and thereby SEN provision could be improved across the board.

Mr. Steinberg: I am sorry if I unintentionally gave the wrong impression. I was trying to say that, in many cases, statements were being made for children because their parents had insisted on the resources. I do not want to bring too much politics into the debate, but resources have been scant in mainstream schools because of the unfortunate policies of the previous Government, and statements were one way in which parents sought to obtain extra resources. I was not saying that they did not deserve those resources or that they were cheating the system; I was merely making the point that that was one way of getting resources and that it was the vociferous middle class who realised that.

Mr. St. Aubyn: I am not sure where that leaves the hon. Gentleman's concerns. Certainly on other occasions it has been implied that a disproportionate advantage was being taken, but I am glad that the hon. Gentleman has been able to clear that matter up.
Provision for special educational needs in the mainstream falls into three categories. There are children who have some physical handicap but tremendous academic potential. It must help the whole school to learn to cope with, and help the development of, such children and to see them develop alongside their peers. Then there are children who have latent academic ability but suffer from a mental block that needs to be overcome. In such cases, special educational attention within the mainstream ensures that their problem is overcome while in other aspects of their development they continue alongside their peers.
There will, however, always be a group of children for whom being in the mainstream is not appropriate. It has to be recognised that it may be appropriate to take them out of the mainstream for a short period. Skills can be developed to enable those children to go back into the mainstream and the objective of many people working in the sector is to ensure that children who come into their care are enabled, so far as is possible, to return to mainstream education. That is where it becomes important that the children's problems are discovered and recognised as soon as possible. The longer problems are allowed to build up, the longer it will take outside the mainstream sector before they are well equipped to re-enter it.
One of the objectives of new clause 14 is to improve what might be called the response time of local education authorities when parents alert the LEA to the fact that they believe that their child needs special educational provision. In previous statements, the Minister has indicated her belief that too much money is spent on the assessment of special needs and on the appeals process and that redirecting those funds alone would unlock a rich purse that could be spent on actual provision, although Conservative Members have expressed scepticism about that. What is important is that methods of good practice are promoted by her Department to ensure that there is prompt recognition of need by local education authorities throughout the country. I have received representations


from interested bodies who have found that LEAs' response times and willingness to respond is patchy and varies significantly from one area to another.
It would be helpful if the Minister clarified the Government's attitude towards the provision of special educational needs by the independent sector. We are not certain about whether the Government are in favour of building bridges with the independent sector or are in favour of blowing them up, as they have done or have tried to do on several occasions. There is clearly an important role for independent schools in special educational provision. A great deal of progress has been made and it is likely that some of the discoveries will emerge from schools that are outside the remit of local education authorities and the state system. It is important that, in developing plans that spell out how special educational needs are to be addressed in any area, a role is identified for such schools so that their innovative work can be encouraged and built on for the benefit of all children with special educational needs.

Mr. John Hayes: I support the principle of LEAs having a responsibility strategically to plan special needs provision in the context of their overall plan for educating children in their area.
My hon. Friends the Members for Guildford (Mr. St. Aubyn) and for Maidenhead (Mrs. May) made a valid point about the significance of the new clause in terms of the message it broadcasts to the wider community, but there is an even more important point about LEAs' overall role in planning school places and admissions, the relationship between special needs provision and the mainstream, and LEAs' critical role in the analysis of individual children's needs. All those factors necessitate LEAs incorporating special needs provision into their strategic plans.
One of the good things that have emerged in special needs education over the past 20 years is the statement. My interest in the subject started when I first became a member of an LEA in 1985—I am still a member of that Nottinghamshire LEA. The statement is undoubtedly a positive thing for parents and children. I do not want to digress into talking about the Green Paper, but there are real concerns about the dilution of the statement. It needs to be said that many parents of special needs children feel that the statement is their only binding guarantee of a decent education in line with their child's needs. That is another reason for supporting the new clause; it would require LEAs to consider the definition of need for children with special needs in the context of their overall education planning.
I have heard many arguments about integration into the mainstream and I listened with interest to the hon. Member for Harrogate and Knaresborough (Mr. Willis), whose arguments have been advanced many times. There are many good social and cultural arguments for integrating children with special needs into mainstream schools. Many parents support that and many children benefit from it, but I have to say that cultural and social reasons cannot be elevated above the individual educational needs of the child. It may be socially desirable for a child to be integrated into the mainstream, but not if that is detrimental to the child's educational progress.
There are many parents of special needs children who take the firm view that their child's special needs are best met by specialist provision which, in practical and

educational terms, can be best met in special schools. I endorse my hon. Friends' comments on the need to retain special schools where those are proven to be the best way of educating children with special needs.
Local education authorities have variable records on special needs provision. That is not a party-political point. Some Conservative LEAs have a less good track record on special needs, as do some Labour LEAs, and there are some controlled by both parties that have excelled. There is great variation in how effectively different authorities have addressed special needs provision and how quick they have been in statementing children. My hon. Friend the Member for Guildford was, however, too generous in that the issue is not just the time that it takes, but the willingness to statement at all. There is considerable variation among LEAs on that as well, which is very worrying. That, too, is not a party-political remark.
6 pm
Like other hon. Members, I should like to mention a constituency case. A child was in mainstream education in Nottinghamshire where, as I have said, I am still a member of the LEA. I was delighted to be able to assist that child, who was suffering bullying at a good mainstream school, not a tough school. I helped the child to transfer out of the mainstream to special needs provision in my constituency in Lincolnshire. The parents uprooted and sold their home to move to Spalding so that their child could be educated in a special needs school and avoid some of the problems that they had encountered in mainstream education, so we must remember that there can be movement both ways.
The biggest growth area in special needs provision—this needs emphasising—is children with emotional behavioural difficulties. A range of studies has illustrated that. They can be the hardest to integrate. LEAs must have a coherent policy on dealing with such children. Provision is pretty patchy and variable across LEAs. Some sweep the issue under the carpet, while others have taken imaginative and innovative approaches, dealing with the problem very effectively. We must have an honest debate about how to deal effectively with what is, sadly, a growth area.
The new clauses would help by obliging LEAs to focus on the issue and build it into their strategic planning.

Ms Estelle Morris: This wide-ranging debate has barely touched on the new clauses in some respects. I do not want to incur your wrath, Mr. Deputy Speaker, or that of hon. Members by spending the rest of the evening debating special educational needs. Suffice it to say that I am grateful to all hon. Members who have chosen to make a contribution on this important issue.
I am pleased to join the hon. Member for Harrogate and Knaresborough (Mr. Willis) in acknowledging that Governments and local councils of all parties have made tremendous progress on SEN provision in recent years. There is unanimity in the House on the importance of the issue and how much there is to be done. That cross-party approach has been evident today. I shall respond to a few of the points that have been raised and then address the new clauses. I shall not ask the House to accept the new clauses, not because I disagree with much of what has been said but because this is not the time for them. There will be other opportunities to propose them.
We should not be having today a further debate on the Green Paper on special needs. There will be a time for that. I do not seek to run away from that debate and I have not done so since the Green Paper was published; I am merely trying to be cautious with our use of time. Our response will appear in June. We are busy analysing more than 3,500 responses from organisations and individuals. Apart from that from the major organisations, I have not even looked at the analysis yet. What I say today should not be regarded as a response to the consultation on the Green Paper.
The hon. Member for Tiverton and Honiton (Mrs. Browning) talked about primary legislation. I do not yet know whether the consultation on the Green Paper will necessitate primary legislation. We have not analysed all the responses and I do not know what the Government will want to take forward, but I have consistently said that if primary legislation is needed we cannot include it in the Bill. My Department will have to take its turn in the search for parliamentary time.

Mr. Dorrell: The Minister has missed the boat.

Ms Morris: We had an important decision to take. We wanted to include SEN provision with other legislation, but we did not feel that we could do it justice in time for the White Paper in June. The two should be regarded as sister papers.
I should like to pick up some of the main strands of the debate. The hon. Member for Aldershot (Mr. Howarth) made a good case for regional planning for SEN. The problem is particularly noticeable for some of the smaller new unitary authorities. With the disabilities and special needs that are increasingly common with medical advances and as more children survive with problems and disabilities that might previously have caused them to die, I am convinced that groups of local authorities will need to join up to plan initially for low incidence disabilities and then, if it works, for more common disabilities.
We suggested pilot studies on regional planning in the Green Paper. We intended to run two pilots on regional planning for SEN, but such has been the response from local authorities that we shall run more than two. When I last looked at the issue, four seemed the likely figure. We have already secured the money. We are currently negotiating with local authorities on a regional basis. We shall be able to announce the local authorities in which the pilots will take place soon.

Mr. Gerald Howarth: I am delighted that the Minister has taken that initiative. When might she announce the pilot areas?

Ms Morris: I see no reason why I could not make that clear once agreement has been received from the local authorities. We have not yet ascertained whether that is the case, but the latest progress report is that there is a high level of interest. I shall not deliberately hold the issue up. The hon. Gentleman is clearly keen and has a constituency interest. I shall ask my officials and let him know whether his local authority has expressed an interest.
I am enormously optimistic about the developments. Hon. Members have talked about local authorities hiding from their responsibilities and being reluctant to go for a statement, or even to acknowledge that there is a need, let alone to begin to find the solution. That has been caused either by a feeling that a single authority's resources cannot effectively be used to meet that need or because the local authority does not have the know-how. Regional planning will be important to ensure progress on that.
There is a danger that we will all stand up and say that inclusion is good and feel happy about that because being inclusive makes us feel that we are doing the right thing. All hon. Members who have spoken in this debate started by saying that inclusion was a good thing—and then went on to say "but". The views ranged from those of the hon. Member for Harrogate and Knaresborough, who thought that inclusion was almost entirely a good thing, but not quite, to those of the hon. Member for Aldershot and some of his hon. Friends, who said that it was a good thing "but", and went on to stress the importance of special schools.
New clause 20 illustrates the problem. It must be good to integrate children with special needs with their peers in mainstream education. If that can be done well, there is no reason why we should not do it. Some hon. Members say "but" because parents have different wishes and children have different needs. We must avoid integrating SEN children badly. We must not integrate before all the partners in the education service are ready. I shall refer to that later.
I reassure the hon. Member for Guildford (Mr. St. Aubyn), who is not in his place, about the role of special schools in the independent sector. I do not know why I need to, because I have already done so time and again. I suspect that he might not have been listening. I see that he has returned to the Chamber. Quite honestly, we could not manage without the contribution that independent special schools make to overall provision.
I remind the hon. Member for Guildford, as an indication of the importance of such schools, that, although they secure capital from independent sources, they rely on local authorities for 80 per cent. and more of their revenue costs. Local authorities refer and buy places in the independent sector, which enables such independent schools to keep going. That partnership between the maintained and independent sectors precedes anything that is being talked about now and is an example of good practice. How it has arisen is for a different debate. Suffice it to say that such good practice and innovative work leaves a bolt hole for schemes such as HIGASHI, which happens overseas, and which some of our parents want to access. Such provision can always be introduced in this country through that channel. I reassure the hon. Gentleman that the independent sector's role is vital and will continue, and that we shall continue to make use of it.
I entirely agree with the hon. Member for Tiverton and Honiton, and applaud her for saying, that if we are serious about meeting the needs of special needs children and being more inclusive we must incorporate their needs in all our planning and stop regarding them as extra. That is what we have done in education development plans. Some of the things that new clause 14 asks us to do should not rightfully be in education development plans, not because they concern SEN but because of what they are. Such things should be done elsewhere.
I remind the House that education development plans essentially ensure that local authorities set targets for improvement and let us know how they intend to meet those targets and what strategies they will put in place to raise standards for all children. Due to the importance of education development plans, we must be careful to be clear and focused about what we ask them to do. They cannot embrace every responsibility of a local authority. That would be wrong and it would dilute their main thrust.
I refer hon. Members to pages 5 and 9 of the draft guidance on EDPs, which states clearly that one of the things about which we will want to know is how pupils with special education needs are supported. The guidance goes on to mention gifted and more able pupils. We debated the definition of special needs. In the section on school population characteristics for each of the main types of school, the guidance states that we will require LEAs to let us know about both statemented and non-statemented children in mainstream and special schools so that there is a clear, year-on-year pen portrait of children with SEN in the area. It is quite clear in the document that targets must be set for special schools and for special needs children in mainstream schools.
I have never been entirely happy—I think that hon. Members will share this view—that there is sufficient fine tuning of targets for GCSEs and key stages to help us recognise the progress of special needs children. That is why we have already set in hand work with the Qualifications and Curriculum Authority to fine tune key stages 1, 2 and 3 so that children who might make progress at those stages will probably have targets set for them by the end of their school careers. Target setting for children with special needs is included, as it should be. I do not want new clause 14 to be accepted because it asks us to do things that are not appropriate for education development plans.

Mr. Hayes: The point that needs to be emphasised is that the target setting process—the development of measurables and deliverables—is intrinsically linked to a particular LEA's view of the number of special needs schools it provides, its school places policy and its strategic approach to SEN. Target setting in individual schools cannot be separated from the overall strategic approach to SEN because the overall approach is bound to impact on it. I support my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) because the point that we are making is that, by trying to separate the two areas—although I acknowledge what the draft guidance suggests—we are not emphasising the interrelationship strongly enough.

Ms Morris: Local authorities need to bring together the different plans that they are required to make. The hon. Gentleman did not serve on the Committee, but he may know that we debated how local authorities and others provide sufficient places for children in their areas. I am sure that he will be reassured to know that we have stated clearly that local authorities must take account of the special educational needs of the children in their area and plan accordingly.
Education development plans are essentially about target setting to raise standards. The key element is that children with special needs are explicitly included. If they

were not, I would be unhappy. We are consulting on the guidelines and listening carefully to ensure that we get it right for SEN children. We shall obviously reflect on the comments as we receive them.
I have tremendous respect for the work that the hon. Member for Harrogate and Knaresborough has done with his school. He is an evangelist in both his commitment and his trail blazing, which shows where the rest of us can go. John Smeaton school, of which the hon. Gentleman was head, is an example of good practice to which we should all be looking.
New clause 20 would remove the provision that we should consider the efficient education of other children. People have talked about sending messages. I have tried to send messages of inclusion and of valuing special needs children. I do not think that we would be doing special needs children any favours if we sent out the message in this debate that their inclusion should be considered without regard to the efficient education of other children. The greatest asset of inclusion is that it benefits both groups of children. We must accept that schools must be equipped and ready in attitude and facilities to meet the needs of SEN children. It can be done; it will be done more, but we must move sensitively and have regard for some of the concerns expressed by hon. Members and in consultation.
One thing amused and interested me in our consultation on the Green Paper. One member of my advisory committee attended two consultation meetings on Tuesday and Wednesday of the same week. Both were very well attended. At the first, he was hauled over the coals about why we had not gone for total inclusion. At the second, he faced a group of angry parents who wanted to know why we were threatening the closure of special schools. Those are the two fears; we must do everything we can to make progress without alienating any of those people. Both groups have rights, fears and expressions of interest.
I hope that the hon. Member for Harrogate and Knaresborough will accept that I am committed, as he is, to ensuring that the Government, with the co-operation of others, deliver our pledge to offer children who can benefit—and parents who want it—an opportunity to take their place in mainstream schools as they will in mainstream society. That is the bottom line.
This has been a useful debate. I hope that the hon. Members for Tiverton and Honiton and for Harrogate and Knaresborough feel that I have answered sympathetically and that they will accept my assurances that the issues that they have raised ought better to be met in different areas of Government education policy.

Mrs. Browning: I am naturally disappointed that the Under-Secretary feels that she cannot accept new clauses 14 and 20, and I must seek some reassurances on various points that she has raised.
The Minister said that local education authorities will be required to provide a snapshot of their special needs provision. Perhaps that would be more appropriate for conclusions to the consultation. I hope that the Minister


will look carefully at disaggregating special needs statistics. I see the Minister wrinkling her nose as she does not like that idea—and I understand why. The problem is that, even now, some LEAs do not recognise specific learning disabilities—they refuse even to recognise the terminology. Unless the guidelines require LEAs to demonstrate clearly how many children with specific disabilities they are making special needs provision for—whether statemented or not—they will continue their current bad practice.

Ms Morris: I have noted the hon. Lady's initial comments. I wrinkled my nose because, following previous exchanges in the House, I talked to the advisory group about disaggregating the statistics. It seemed ridiculous that no one could tell me how many autistic children were in mainstream schools, but nothing is as easy as it sounds. The answer that I received from academics—some of whom were mentioned by the hon. Member for Harrogate and Knaresborough (Mr. Willis) and one of whom serves on the advisory group—is that it is not as easy to define groups as we might imagine. It is very difficult to distinguish children with emotional and behavioural difficulties from those who are naughty, disturbed or mentally ill. I shall continue to reflect on that matter, but the task is not as easy as I first thought.

Mrs. Browning: I fully accept that, but I urge the Minister not to let go. For years, some LEAs have deliberately flown in the face of medical diagnoses. Parents may have pieces of paper from qualified doctors or clinical psychologists stating that their child has been diagnosed with a particular illness, yet that terminology is not recognised by the LEA from which that child seeks education provision. We must address that problem. I urge the hon. Lady to keep at it—I assure her that I shall support her to the hilt.
The Minister also said that, when she concludes the consultation process, there may be a need for primary legislation and that her Department would have to wait its turn. Today's national press carry details of the Government's agenda for the next parliamentary year—although I do not know how accurate it is. When education legislation is before the House, the Minister should use that opportunity to introduce primary legislation on special educational needs; otherwise, she may have a long wait. I urge her not to let any opportunities slip: if she feels that primary legislation is necessary, she should do her best to bring it to the Floor of the House at the earliest possible opportunity. We do not want long delays.
I am disappointed by the Minister's decision, but she has promised further time for debate on the Floor of the House before any major decisions are made about changing SEN significantly. The Minister will report in June and I hope that, if there are significant changes, she will bring them to the House when it returns after the summer recess. Those changes should not go through during the recess as hon. Members must have an opportunity to voice their opinions and contribute to the proposals. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 15

ADDITIONAL PROVISION WITH RESPECT TO TARGETS

'.—In section 19 of the Education Act 1997 (School performance targets), in subsection (1), after 'set' there shall be inserted "after consultation with the local education authority.".'.—[Mr. Don Foster.]

Brought up, and read the First time.

Mr. Don Foster: I beg to move, That the clause be read a Second time.
New clause 15 raises the question of target setting and the relationship between individual schools and their local education authorities. The new clause would require governing bodies to consult their local education authorities before setting performance targets. That will be achieved by amending the Education Act 1997. I am delighted that the Under-Secretary will respond to the debate on the new clause. If she checks her records, she will see that, during debate on that earlier legislation, she was a sponsor of amendment No. 208. As new clause 15 is almost identical to the amendment that she proposed approximately one year ago, I look forward to her support when we discuss the issue further.
The new clause is about target setting and the relationship between local education authorities and schools. It is now accepted by all hon. Members that target setting can play an important role in helping to raise standards. That is why the Liberal Democrats are prepared to support the Government's initiatives in that regard. However, we are conscious of the fact that target setting alone will not raise standards; other processes must be in place. After all, there is little point in setting a high hurdle unless we help people get over it.
A more important issue is the nature of the relationship between local education authorities and individual schools. There was considerable debate about that in Committee. I think it fair to say that Opposition Members were somewhat confused about the nature of the Government's understanding of the relationship between schools and LEAs. That was particularly true in relation to target setting. There was considerable confusion about who would be responsible for agreeing or setting targets. For example, I refer to the contribution by the Minister for School Standards in Committee on 29 January, when he said:
The LEA will need to engage in discussion with the school and agree targets for it.
The Government clearly believe that the LEA will set the targets and that the schools must accept them. However, the Minister went on:
It will always be for the school to agree to the targets proposed by the LEA, but it will be for the LEA to challenge the school to do better and to get it to sign up to those improved standards."—[Official Report A, Standing Committee, 29 January 1998; c. 178.]
It is clear that the LEA will set the targets and that the school must agree to them. Later in our deliberations on the same day, the Under-Secretary said at column 191 that the schools would be responsible for setting targets. She went on to say that she believed that it was important that the targets were owned by individual schools. She argued persuasively that, if the target-setting agenda was to be successful, schools had to set and own their targets.
The Committee also agreed—I hope the House will accept this also—that, if schools and local education authorities are to have an effective relationship, it is vital


to involve local authorities in the target-setting process. If we refer to page 26 of the White Paper "Excellence in schools"—which preceded the Bill—we see that the Government had a clear view of the nature of that relationship. The White Paper states:
The Government sets national targets and publishes national performance and benchmark data.
Each LEA provides benchmarking data and guidance to all its schools to help them set targets.
Each school sets draft targets, taking account of the comparative data and their own previous best performance, for discussion with its LEA.
Finally, the White Paper states:
Schools and LEAs agree targets, covering a 3-year period and subject to annual review.
The crucial phrase is "for discussion" with its LEA. The new clause would ensure that an assurance was written into the Bill that the governing body of a school will consult its LEA before targets for the school, which the body will continue to own, are agreed.
Given that the new clause is almost identical to an amendment that the Under-Secretary proposed approximately 12 months ago, I very much hope that it will have her support.

Ms Estelle Morris: I have to admit that I have never understood the problems that the hon. Member for Bath (Mr. Foster) seems to have with this matter. In Committee, my hon. Friend the Minister for School Standards and I both made it clear where the responsibility for target setting lies. I am happy to reaffirm our commitment to setting targets as an important part of the agenda of raising standards and to reiterate my words in Committee. Ownership of targets by schools is important. The role of the local education authority is crucial. The hon. Gentleman referred to comments made by my hon. Friend that were made in the debate in which Leafy Lane and Park View schools were born. We had a long and interesting debate and those schools stayed in existence until the end of the Standing Committee, with hon. Members on both sides referring back to them at suitable points in our exchanges.
My hon. Friends referred to Leafy Lane, Park View and all the rest, because target setting is not merely about ensuring that schools that do not get good results improve, but about ensuring that schools that get what appear to be adequate results improve as well. We commented that there was much under-performance in Leafy Lane schools that needed to be challenged. The crucial role of the local authority in this matter is to provide comparative information about schools' performances in similar circumstances—similar in prior attainment, in the backgrounds of children and in the environments of the schools—which means that, when schools set targets, they cannot hide away and loiter in the middle of the school performance table. That is the role of local authorities—to challenge the target-setting progress of schools and point out to them that they may be happy to set X, but that a school with similar circumstances in the borough has set X plus Y.
From our experience of local authorities setting targets on a local authority-wide basis, we know that schools want to meet the best target that other schools in similar

circumstances are meeting. The qualitative information that local authorities provide will be helpful to schools in setting targets.
As my hon. Friend the Minister for School Standards said, and as I repeated later:
Responsibility rests with the school and the individual classroom teacher".—[Official Report, Standing Committee A, 29 January 1998; c. 178.]
I am happy to repeat again that the responsibility for setting targets must lie with the bodies that will primarily be responsible for ensuring that the targets are achieved—schools. It is right that that should happen, but it is also right that schools should listen to what local authorities say.
In the vast majority of cases, there will not be a dispute. Schools will welcome the information that local authorities can bring. They will benefit from the exchange of information that they and their governing bodies will have with the local authority. The result will be that the targets set will be sufficiently challenging to do their job of raising standards.

Mr. Don Foster: Does the Under-Secretary accept that there is a possibility of a dispute between a local education authority and a school only if there has been consultation on the issue between them? Will she confirm that it will be a requirement for schools to consult the LEA before they finalise their targets? That is all that the new clause would ensure.

Ms Morris: I do not want to avoid the question, but that depends on what the hon. Gentleman means by "consult". If he is asking schools to consult local education authorities and defer to their opinion, the answer is no. If he is asking them to talk to the LEA about their targets, the answer is yes. The real difficulty is—perhaps this has been the source of our debates—that, if the school and the LEA cannot agree, the local authority's targets stand, but the fact that there has been a dispute can be recorded in the plan that goes forward. What is the hon. Gentleman's interpretation of the word "consult"? Does it mean bargaining and schools having to do what they do not want to meet the needs of the local authority? No. Schools must set their own targets. If consultation means talk, we can find accord with that.
I do not think that there is a million miles between us on this matter and, my having given him those assurances, perhaps the hon. Gentleman will see fit to withdraw the motion.

Mr. Foster: Towards the end of the Under-Secretary's remarks, we were beginning to get a clear assurance that she would expect consultation of the type which she described—not a one-way consultation in which the LEA is determined to have its way, but a two-way consultation between the school and the LEA.
The Under-Secretary wonders why I have continued to be somewhat confused about the Government's position. If she reads in Hansard her contribution to the debate on new clause 14 on special educational needs, she will find that she continued some of the confusion. If I noted it correctly, in her reply to that debate she said:
targets must be set for special schools".


The confusion about who is responsible for setting targets is part of the reason for my confusion.

Ms Morris: I would hate the hon. Gentleman to continue to be confused after this debate. Perhaps I was not clear in my use of words. I was referring to the documentation that is sent to the Department for approval, in which we are asking for targets school by school. The word "for" refers to the fact that LEAs must record the targets for special schools, not that they must do it on their behalf.

Mr. Foster: I am grateful to the Under-Secretary for acknowledging that her words were somewhat unclear. I pressed the issue because of that lack of clarity, but given the clear undertaking that the hon. Lady has given about the need for consultation, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Clause 1

POWER TO SET LIMITS ON INFANT CLASS SIZES

Amendment made: No. 79, in page 1, line 9, leave out 'may' and insert 'shall'.—[Mr.Jamieson.]

Clause 3

PAYMENT OF GRANT IN CONNECTION WITH REDUCTIONS IN INFANT CLASS SIZES

Amendment made: No. 80, in page 3, line 1, leave out 'may' and insert 'shall'.—[Mr. Jamieson.]

Clause 10

ESTABLISHMENT OF EDUCATION ACTION ZONES

Mr. Don Foster: I beg to move amendment No. 121, in page 10, line 7, leave out from 'purpose' to the end of line 9 and insert—

'(a) with the consent of the governing body of every school which it is proposed should be a participating school, and
(b) where the LEA is not making the application, with evidence that it has been consulted by the proposers, with a view to being a partner in the Education action zone.'.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss the following amendments: Government amendment No. 85.
No. 88, in clause 12, page 11, line 13, at end insert—
'(3A) In discharging any function transferred to it under the provisions of subsection (2) of this section an Education Action Forum may enter a contract for the performance of that function with any party, whether from the public or private sector, who, in the opinion of the Education Action Forum, is a fit and proper party to discharge the function or functions covered by the contract.
(3B) Any party with whom the Education Action Forum enters a contract under the terms of subsection (3A) of this section (hereinafter referred to as "the contractor") shall be responsible for delivering the service defined in the contract with the Education Action Forum to the standard defined in the said contract and shall be permitted to acquire, employ, and manage, on terms to be

determined by the contractor, such equipment, staff and other resources as he believes to be necessary to perform the duties defined in the contract.'.
No. 122, in clause 13, page 11, line 35, after 'them', insert
'and where the employer is the local education authority, consult with that local education authority,'.
Government amendments Nos. 86 and 87.

Mr. Foster: The amendment is similar to new clause 15 in that it deals with the relationship between local education authorities and schools, but in this case it deals with schools forming part of an education action zone.
I must take this opportunity to place on record in the House what I said in Committee. We Liberal Democrats are very supportive of the Government's proposals for education action zones, at least in principle. In Committee, we had discussions about some of the detailed operations of the zones and had the opportunity to press some concerns.
Education action zones are an important feature of the Bill. We hope that, when the Minister examines the bids for the first few zones, he will find himself inundated with exciting proposals for new forms of partnership in education, which will bring together not only schools but other interested bodies, including private businesses and other representatives of the local community, as well as further education colleges and perhaps even universities. We believe that EAZs will above all offer an opportunity for some exciting thinking about how education can develop to meet the needs of children in the next millennium.
Because it is so important that EAZs are successful partnerships, we must ensure that all possible partners are involved. In Committee, I tabled amendments to ensure that the local education authority would have the opportunity to be a partner. As was clear from our discussions, the Government expected that, in the vast majority of cases, LEAs would be partners, although, as was rightly pointed out, there might be cases in which it would be unhelpful for the LEA—perhaps because it was deemed to be failing the schools in its area, or because it wanted to propose a different EAZ consortium—automatically to have the right to membership of the EAZ.
As I was able to demonstrate in Committee, all the Government's documentation showed that, until the last minute, the Government clearly intended that LEAs should participate in all EAZs. I think that we now understand why they shifted their position slightly. Nevertheless, it is vital that the LEA is at least consulted about the applications for each EAZ, so that it can decide whether to become a partner.
Unlike the amendments that I tabled in Committee, amendment No. 121 does not insist on a guaranteed role for the LEA in the education action forum; it merely suggests that there should be clear evidence that the LEA has been consulted on whether it wants to be a partner in the EAZ.
I hope that the Minister will recognise the importance of that, as he knows that the LEA will continue to have responsibilities, many of which are specified in the Bill, for the schools in any EAZ that is established. Those responsibilities include setting targets, operating early warning systems, reviewing special educational needs


arrangements and providing for pupils with emotional and behavioural difficulties and for those who are educated out of school.
There are many other reasons why the partners in the EAZ will need to understand an LEA's work, not least in relation to local management of schools budget arrangements, the LEA services which are available, the requirement for continuing professional development, the relationship between a school's organisation committee, the LEA and the forum, and the general interrelationship of the LEA and more general local authority educational services.
Given that the LEA will carry out many functions that will affect schools in an EAZ, and given the need for schools in an EAZ to know about the work of the LEA, it is obvious that the LEA must be involved in some way in all EAZs. At the very least, the LEA must be consulted about plans to establish an EAZ and given the opportunity to become a member. I hope that the House will agree to the amendment.

Mr. Dorrell: I want to speak principally to amendment No. 88, which belongs to this group of amendments but which I shall seek, with your consent, Mr. Deputy Speaker, to put to a separate decision by the House. Its purpose is to tease out exactly what the Government think an education action zone will mean.
Like the hon. Member for Bath (Mr. Foster), when I first heard about education action zones, I found the idea rather attractive. It was certainly presented as an important new part of the Government's armoury for improving the delivery of service by our schools. At the north of England education conference at the beginning of this year, Professor Barber trumpeted it as an important step forward in introducing a new perspective—it would be an opportunity for new management and new ideas in areas where, for whatever reason, the Secretary of State felt that there were inadequate new ideas.
It seemed, originally, that the education action zones would be targeted at problem areas in the school system, but it became clear in Committee that the Minister wanted them to be established not only in areas of low educational attainment, but in any part of the country where he felt that improvement in service delivery by maintained sector schools was possible—he was looking for opportunities to introduce new structures and fresh ideas to any part of the country where significant improvement was possible.
All that seemed a rather attractive idea. When I was asked for my reaction to the proposal at the north of England conference, I said that I was receptive to the idea and would look forward to Ministers sketching out the detail. However, in Committee, when we considered the details of what the idea would mean in practice, the excitement started to fall away. It became obvious that the Government were unclear about their intentions for education action zones.
It is important that we should be clear about the Bill's provisions. When the Secretary of State has determined that an area should be an education action zone, individual schools' governing bodies will be responsible for deciding whether to participate. I agree with that—a school's participation should be voluntary.
When Professor Barber launched the idea, he made it clear that it was explicitly intended that the private sector should be able to play a role in the new structure, to bring

in new ideas for the delivery of service. I understand that, at the north of England education conference, he speculated publicly that one of the companies that could be introduced—not only as advisers on a governing body or to provide tangential, relatively detailed advice, but as mainstream managers of the delivery of the schools service—was Procter and Gamble.
I admired the provocation that Professor Barber clearly enjoyed introducing to the argument. It was a piece of iconoclasm, although it is perhaps less provocative to those who recognise that Procter and Gamble already runs charter schools in the United States, where it picked up the concept—it is charged with delivering a specialist improvement in the schools service in different American cities. When I heard that the concept was part of the Government's idea, I thought that it was attractive. The name Procter and Gamble is provocative, but a more home-grown company is Nord Anglia, a British company with experience of employing teachers, managing schools and delivering a schools service.
The purpose of amendment No. 88, tabled by me and of my hon. Friends, is to probe the Government on whether they intend to create the opportunity for Nord Anglia and Procter and Gamble to manage and deliver a school service in an area where improvement is possible. When we came to this section of the Bill in Committee, it became pretty clear that at the very least there was a question mark over the idea. My hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) asked the Minister for School Standards:
Will there be any circumstances in which a company will employ the teachers and have a form contractual arrangement with them?
It may be the Government's vision that Nord Anglia, Procter and Gamble or anyone else should have the opportunity to deliver a new schools management service, as defined by proper public authorities, but it will be hard for a company to do so if it is not allowed to employ teachers.
The Minister's response in the Committee was rather depressing. He said:
We currently take the view that teachers will be employed by their employing body, be that a local education authority or an individual school.
I do not understand how we deliver the objective that Procter and Gamble certainly delivers in some charter schools in America.

Mr. Byers: I shall deal with this issue at greater length in my reply to the debate, but I draw the right hon. Gentleman's attention to Government amendment No. 85. He will see that we intend to give legal powers to the forum. That was not the case when we debated the matter in Committee. We recognise that we need to have clarity and that is why we intend to put the education forum in the position of employer. That was not the case when we debated the matter in Committee.

Mr. Dorrell: I have seen that amendment and I understand that it is relevant, but in a sense it compounds the problem. The Government envisage that a manager will take over the management of a school where there is a problem—whether it is of low attainment or, to take the Minister's argument from Leafy Lane high, of low expectations, and there is an opportunity for improvement in a school that is complacent. Whatever the purpose of


taking a school into an education action zone, if a company such as Nord Anglia or Procter and Gamble is to have responsibility for delivering the improved service that the Government say that they seek, it must have the power to manage all the necessary resources.
Government amendment No. 85 merely underlines the timidity of the response offered by the Minister in Committee and repeated by the Under-Secretary. I gave the Government a second chance to deal with the question. The Under-Secretary confirmed that at that stage
the teachers would continue to be employed by…the LEA."—[Official Report, Standing Committee A, 3 February 1998; c. 270–76.]
The Government's amendment says that the teacher contract can be converted to an EAZ contract, but that still does not allow an EAZ to decide that a bidder for the delivery of a school service offers to the children of a district the opportunity of a better education that meets their needs better and offers them a better start in life.
The Minister will acknowledge that the EAZ concept is based loosely on the ideas that have been shown to work in some very difficult city schools in the United States. I hope and believe that the Government are trying to learn those lessons. I do not believe that they will achieve that objective if they do not give the enterprise with the responsibility for managing the school the power that it needs to deliver its objectives in what will often be difficult circumstances. That is why our amendment makes it clear that, although not in every case—I do not say that this should apply in every EAZ—where a bidder wants to employ, manage and be responsible for all the resources in a school, and the EAZ is convinced that that is the best way of delivering the service in that area, that power should be available.
I appeal to the Government to have the courage of their convictions to embrace their own idea and not to run away from their own radicalism.

Mrs. May: I shall concentrate my comments on amendment No. 88, but I shall make passing reference to amendment No. 121, tabled by the hon. Members for Bath (Mr. Foster) and for Harrogate and Knaresborough (Mr. Willis). It refers to the role that the LEA should play in bringing forward an education action zone. That proposal is interesting. It shows yet again that the Liberal Democrats constantly come back to the role of the LEA as the single deciding body to be involved in every aspect of education.
The Liberal Democrats do not simply suggest that where the LEA is not making an application, schools that wish to bring forward an EAZ should show that they have discussed or referred the matter to the LEA. There might be some sense in saying that schools within an LEA, or under two or three LEAs where schools wish to group together, should alert their LEAs to the fact that they are proposing an EAZ. The Liberal Democrats are saying that the schools must refer to the LEA with a view to its being a partner in the EAZ. They intend to remove the considerable flexibility that the Government have built into the Bill. That is why I am concerned. As in so many debates in Committee, the Liberal Democrats seem unable to envisage the provision of any aspect of education without a central and determining role for the LEA.
Like my right hon. Friend the Member for Charnwood (Mr. Dorrell), I was interested in the concept of EAZs when it was first introduced. I seem to recall that the concept raised considerable interest not only among Conservative Members, but in a number of national newspapers, including The Daily Telegraph, which said that the Government had come up with a radical and forward-thinking idea—very new Labour. However, as with so many new Labour ideas, including several in the Bill, the words and the practice tend to differ considerably. A radical message was put out to the press that the Government were thinking outside any confines about how they provided education, that they would innovate and that EAZs were one of the ways in which they would do so. Suddenly we see that the restrictions placed on the development of EAZs in the Bill mean that they are not as innovative as the Government would have people believe.
My right hon. Friend the Member for Charnwood made specific reference to EAZs, and we dwelt on them in Committee. It was not clear initially exactly what the Government's proposals were on employment. I accept that the Minister said that the Government were introducing their own amendment on the employment aspect of the operation of EAZs under the education action forum, but they are still shying away from the true concept of the EAZ as it was first expressed and understood when the Government proposed it. It is important to go back to that point.
There have been other misunderstandings. In the initial stages, it was expected that the Government intended to use EAZs purely as a way of helping failing schools to find another way of coming together to produce innovative ideas, to get over their problems. However, it has been made clear, and I hope that the Minister will reiterate it for the record today, that the Government do not intend to put in place EAZs purely as a structure for failing schools. It is a structure that any group of schools can request from the Secretary of State, even schools that are not underperforming, such as Leafy Lane high in the example that we were given in Committee. Schools that are performing well may want to be removed from the rigours of LEA control, to look for new ways of providing education. They will be able to come together with a proposal to set up an education action zone and an education action forum.
7 pm
It is ironic that the Bill abolishes grant-maintained schools, yet introduces very similar powers—the same powers in relation to employment—for education action zones. The Government tell us that an individual school cannot set itself apart from the local education authority and cannot remove itself from the strictures of the LEA, although many schools have done that with enormous success. The Government say that individual schools can no longer do that, but if the school gets together with two or three others, they can form what the Government call an education action zone and do that.
In the debate in Committee, we were told—by the Under-Secretary, as I recollect—that the EAZ was a new structure for education for the new millennium, and that we must stop thinking in the old way about schools being under an LEA. We must drop those ideas and start looking


at new ways in which schools can come together and find new ideas on providing education for the children who choose to go to those schools.
Despite all that, we see from the Bill that the Government are not prepared to go that extra step. They say that EAZs are an innovative model and the new way forward, but they are not prepared to give EAZs all the powers necessary to do whatever they—the EAZs—consider appropriate to improve the standard of education in schools in that zone.
Amendment No. 88 would put into practice what the Government seem to have been saying in the early stages of the debate on EAZs. It will be interesting to hear how the Minister of State responds. The idea of EAZs and the powers given to them in the Bill are at the boundary between new Labour and old Labour. How far are the Government willing to go, to put into practice what they proclaimed about innovation in education for the new millennium? If they are committed to innovation, they will accept amendment No. 88, give education action zones full powers, especially in regard to employment, and enable EAZs to set themselves up as innovative groups of schools that are ready to consider new ways of providing a high standard of education.

Mr. St. Aubyn: I apologise for not being present for the beginning of the debate, but I was present during the Committee stage and am aware of some of the issues involved. I should be grateful if the Minister clarified a particular point. We shall have a debate later on grant-maintained schools. Having spoken at length to representatives of grant-maintained schools in my constituency, I know that they have severe doubts about the option of having foundation school status. We have discussed the idea of those schools forming an education action zone.
Will the Minister confirm that education action zones are not just for areas where the education system is seen to be failing, and that they are applicable to areas where a group of schools are striving for excellence? For whatever reason, those schools may not see control and regulation by the local education authority as their preferred route, and may see an interesting and exciting future in the new EAZ mechanism. Will he confirm that, under the Bill, it will be possible for such a group of schools to undertake that exciting initiative?

Mr. Byers: I shall start by replying to the hon. Member for Guildford (Mr. St. Aubyn). I confirm that nothing in the Bill restricts education action zones to any particular type of school, whether it is underperforming, underachieving, or whatever. The Bill provides a mechanism to allow education action zones to be established.
The Government are looking to establish five EAZs with effect from September, and increasing that number to 25, probably by the autumn of next year. As we consider the applications that are submitted, we shall want to achieve a good geographical spread of EAZs, mixing urban and rural areas, and different types of school. The important aspect of the EAZ concept—this addresses some of the points raised by the hon. Member for Maidenhead (Mrs. May)—is that we see EAZs as the test bed for the schools service of the next century. That is why we want groups of schools, perhaps in partnership

with local authorities or with the private sector, to come forward with new and exciting ideas. We want to examine ways in which we can empower schools.
Our earlier debate underlined the fact that schools have the primary responsibility for raising standards. If, through the EAZ concept, we can engage and motivate schools of whatever type, the Government are prepared to facilitate that and support schools that want to take advantage of the freedoms that might be made available in the EAZ.
That is why the three Government amendments are important. Government amendment No. 85, which I mentioned in an intervention in the speech of the right hon. Member for Charnwood (Mr. Dorrell), makes the EAZ accountable as an employer for the decisions that it makes in relation to the people whom it legally employs.
Government amendment No. 86 gives the Secretary of State the power to approve or reject applications to disapply the national teachers' pay and conditions document. We consider it appropriate for the Secretary of State to have that power, because we want to monitor carefully a new teachers' contract and a new system of remuneration for teachers. The Secretary of State needs to be involved in that process, so that we can see what works and what does not work so well.

Mr. Willis: That matter concerns many teachers. As my hon. Friend the Member for Bath (Mr. Foster) has made clear, we support the general principle of the Government's proposal, but if, after three or five years of an education action zone, when there has been a disapplication of conditions of service and there are new rates of pay, will the Government underwrite those new conditions of service and rates of pay if the EAZ completes its work, or will it be the job of the LEA to do that? How will we assure teachers working in the schools that will move into those EAZs that their pension rights and future pay and conditions will not be jeopardised by what could be a glorious experiment for Nord Anglia?

Mr. Byers: The Government fully understand those concerns. When we deal with amendment No. 122, tabled by the hon. Member for Bath (Mr. Foster), we shall state clearly that there will need to be proper consultation with teachers, with their representative organisations and with local education authorities as employers about the changes that a forum might want to introduce in teachers' pay and conditions. We want people to be involved, so that they can express views on those pressing matters. We want a system whereby in three or five years, those teachers will be entering a quite different world from that of 1998.
I should be surprised if we did not look differently at teachers' pay and conditions in the light of the experience of EAZs. They are the test bed for the schools system for the next century. Changes will arise as a result of the initiatives that take place in the EAZs.
It is interesting to note that the advice that I have from my civil servants is that amendment No. 88 is redundant because the powers that it seeks to introduce are in the Bill as a result of the powers that we intend to give the education action forums. The point of the education action forum is that its powers are ceded from individual governing bodies. That makes the point that governing bodies are agreeing voluntarily that their powers should be given up to the education action forum. The education


action forum can then act almost as a collegiate governing body. It will have all the powers that an individual governing body has at present. It could buy in specific services—for example, managing the payroll, running specialist literacy programmes and providing school meals.
Those are modest measures, and if this is to be an exciting initiative, we must go beyond them. It is most important that the education action forum is responsible for determining the aims and objectives of the schools for which it has responsibility; for monitoring and evaluating the schools' performance; for raising standards of educational achievement through determining the schools' strategy for improving performance; and for setting targets and taking any necessary action to support them.
It will be for the education action forum to decide who is best placed to achieve those objectives. If the education action forum takes the view that Nord Anglia or Procter and Gamble—given its good experience in America—is best placed to deliver those objectives, there is nothing in the Bill to stop the education action forum doing that.

Mr. Dorrell: That is crucial to the argument. The Minister is saying that the education action forum will have no powers that are not currently vested in governing bodies, because all the powers of the education action forum will be delegated to it by the governing body. Is he therefore saying that any governing body in the maintained system already has the power, if it chooses, to subcontract the management of its school to Nord Anglia?

Mr. Byers: It depends on exactly what the governing body wants Nord Anglia to do. At the moment, it could put payroll management or specialist literacy services out to Nord Anglia. The framework that we have inherited from the previous Administration places restrictions on exactly what governing bodies can do. As a result of the new framework, an education action forum will have the power from September next year to contract out to Nord Anglia or Procter and Gamble, to deliver those services and to meet objectives. Legally, it will be able to do that.

Mr. Dorrell: As the Minister recognised, subcontracting the power to run payroll services can be useful, but it is not what we are talking about. We are talking about the management of the school, the delivery of education services, deciding whom the school employs, deciding the terms and how their time is used, and the experience of the child in the classroom. Does an existing school have the power to subcontract those functions to a commercial company? If it does not, the Minister has not shown how the power can be vested in a forum. He said that the forum has only the powers delegated to it by the governing body.

Mr. Byers: The governing body will be responsible under the new framework that we are introducing in September next year. The education action zones will operate on a voluntary basis, depending on when the Bill reaches the statute book—probably five will operate from this September—and they will have full legal powers from September next year. If an education action forum has powers ceded to it by the governing bodies, it will be able to engage the private sector or the local education authority to meet its objectives. That is why education action zones

are an exciting initiative—there will be flexibility. I hope that that meets the concerns expressed by the hon. Member for Maidenhead, who thought that this was a modest proposal. The powers are there, which is why my officials state that amendment No. 88 is unnecessary.

Mr. Andrew Rowe: Would the powers to be ceded include the power to suspend pupils? That would be an interesting departure from the norm. For the first time, the power to suspend a pupil would be given to a private company, which would not be in the same contractual relationship with the parent as a school.

Mr. Byers: The powers of the education action forum are derived from governing bodies ceding the powers that they have at present. We do not foresee a situation in which some of the exclusion powers would be handed over to a third party. Technically, that might be possible, but there are provisions elsewhere in the Bill, which prescribe the circumstances in which exclusions can and cannot take place.

Mr. Don Foster: For the avoidance of confusion, can the Minister confirm that once an education action zone is set up, the staff currently employed by the schools within the zone will continue to be employed by the LEA, and only new staff chosen by the forum will be employed by the forum? Can he confirm that it will not be possible to send on to a third party the responsibility for the delivery of the curriculum?

Mr. Byers: It is more complicated than that. Under the framework, certain schools—for example, foundation schools—will be the employer of their staff. It is far more complicated than just saying that there is a blanket approach. One of the powers to be given to the education action zones will be to disapply the provisions of the national curriculum, so that they have greater flexibility. I am afraid that there is not a simple answer to the hon. Gentleman's complicated question.
Amendments Nos. 121 and 122 were tabled by the hon. Member for Bath. I understand his concerns about the need to involve LEAs, which will still have the underlying statutory responsibility for ensuring that children in their area receive an adequate and suitable education in terms of their age and ability. There is a difficulty with the way in which amendment No. 121 is worded, because it talks about consultation, but then refers to the LEA as a partner. The amendment states:
with a view to being a partner in the Education action zone".
There is a legal difficulty with that.
I might be able to help the hon. Member for Bath by referring to the guidance sent to the interested parties that might want to promote an education action zone, in which we make it clear that different zones will be run in different ways:
In many cases, the LEA will be the driving force behind the proposal… In such cases there would still be a central role for business and for community and voluntary organisations.


The hon. Gentleman is concerned about situations in which the LEA may not be the driving force behind the proposal. The guidance states:
In others, a proposal to create a zone might come from a business, community or voluntary organisation, in conjunction with a group of schools"—
addressing the situation that was referred to earlier.
This allows for new and exciting groups to become involved in running an Action Forum, bringing with them fresh ideas on school improvement. In such cases, the LEA would be consulted in the development of the proposal, and we expect that LEAs will want to work closely with any successful bids which come through this route.
That is more appropriate than requiring that to be so, because there may be circumstances in which, for one reason or another, the LEA is not happy with the group of schools with approval for education action zone status.
We can guarantee that consultation will be required before a proposal is approved by the Secretary of State, but we do not feel that it is appropriate to go further. Amendment No. 121 talks about the LEA, as of right, being guaranteed a place as a partner in the proposal. That would be inflexible and would create a range of possible difficulties.

Mr. Don Foster: The Minister seriously misrepresents the amendment when he says that it states that the LEA would, as of right, expect to have a place on the forum. I hope that he will accept that the amendment's wording is clear and does not have the interpretation that he has given it.

Mr. Byers: Legally, the hon. Gentleman's amendment can have that interpretation, which is why I shall ask the House to resist it.
Education action zones are an exciting initiative. They will allow schools to raise standards in new and imaginative ways. For those reasons, I ask the House to reject the Liberal Democrat amendments but to endorse Government amendments Nos. 85, 86 and 87.

Mr. Foster: Although I am delighted that the Minister has acknowledged that there is a need to consult the LEA in the vast majority of cases, given the many roles that it will continue to have in respect of schools that may form an education action zone, it is vital that we have a much clearer indication that the LEA will be consulted and that it is given an opportunity to consider whether it is appropriate for it to become a member of the education action zone.
As we have not received sufficient assurances, we wish to press the amendment to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 48, Noes 284.

Division No. 199]
[7.20 pm


AYES


Allan, Richard
Breed, Colin


Ashdown, Rt Hon Paddy
Bruce, Malcolm (Gordon)


Baker, Norman
Burnett, John


Ballard, Mrs Jackie
Burstow, Paul


Beggs, Roy
Cable, Dr Vincent


Bell, Martin (Tatton)
Campbell, Menzies (NE Fife)


Brake, Tom
Chidgey, David


Brand, Dr Peter
Cotter, Brian



Dafis, Cynog





Davey, Edward (Kingston)
Michie, Mrs Ray (Argyll & Bute)


Donaldson, Jeffrey
Oaten, Mark


Forsythe, Clifford
Öpik, Lembit


Foster, Don (Bath)
Rendel, David


George, Andrew (St Ives)
Russell, Bob (Colchester)


Hancock, Mike
Sanders, Adrian


Harris, Dr Evan
Smith, Sir Robert (W Ab'd'ns)


Harvey, Nick
Smyth, Rev Martin (Belfast S)


Hughes, Simon (Southwark N)
Taylor, Matthew (Truro)


Jones, Ieuan Wyn (Ynys Môn)
Tonge, Dr Jenny


Jones, Nigel (Cheltenham)
Tyler, Paul


Keetch, Paul
Wallace, James


Kennedy, Charles (Ross Skye)
Webb, Steve


Kirkwood, Archy
Wigley, Rt Hon Dafydd


Livsey, Richard



Maclennan, Rt Hon Robert
Tellers for the Ayes:


Maginnis, Ken
Mr. Donald Gorrie and



Mr. Phil Willis.


NOES


Ainger, Nick
Corbyn, Jeremy


Ainsworth, Robert (Cov'try NE)
Corston, Ms Jean


Alexander, Douglas
Cox, Tom


Allen, Graham
Cranston, Ross


Anderson, Janet (Rossendale)
Crausby, David


Armstrong, Ms Hilary
Cryer, Mrs Ann (Keighley)


Ashton, Joe
Cryer, John (Hornchurch)


Atherton, Ms Candy
Cummings, John


Atkins, Charlotte
Cunningham, Jim (Cov'try S)


Austin, John
Dalyell, Tam


Barnes, Harry
Darvill, Keith


Beard, Nigel
Davey, Valerie (Bristol W)


Bell, Stuart (Middlesbrough)
Davidson, Ian


Benn, Rt Hon Tony
Davies, Rt Hon Denzil (Llanelli)


Bennett, Andrew F
Davies, Geraint (Croydon C)


Benton, Joe
Davies, Rt Hon Ron (Caerphilly)


Berry, Roger
Davis, Terry (B'ham Hodge H)


Best, Harold
Dawson, Hilton


Betts, Clive
Dismore, Andrew


Blackman, Liz
Dobbin, Jim


Blears, Ms Hazel
Donohoe, Brian H


Blizzard, Bob
Dowd, Jim


Blunkett, Rt Hon David
Drown, Ms Julia


Borrow, David
Dunwoody, Mrs Gwyneth


Bradley, Keith (Withington)
Eagle, Angela (Wallasey)


Bradshaw, Ben
Eagle, Maria (L'pool Garston)


Brinton, Mrs Helen
Edwards, Huw


Brown, Rt Hon Nick (Newcastle E)
Efford, Clive


Brown, Russell (Dumfries)
Ellman, Mrs Louise


Browne, Desmond
Ennis, Jeff


Burden, Richard
Etherington, Bill


Burgon, Colin
Field, Rt Hon Frank


Butler, Mrs Christine
Fisher, Mark


Byers, Stephen
Fitzsimons, Lorna


Campbell, Alan (Tynemouth)
Flint, Caroline


Campbell, Mrs Anne (C'bridge)
Flynn, Paul


Campbell, Ronnie (Blyth V)
Follett, Barbara


Canavan, Dennis
Foster, Michael Jabez (Hastings)


Caplin, Ivor
Foster, Michael J (Worcester)


Casale, Roger
Foulkes, George


Caton, Martin
Fyfe, Maria


Cawsey, Ian
Gapes, Mike


Chaytor, David
George, Bruce (Walsall S)


Church, Ms Judith
Gerrard, Neil


Clapham, Michael
Gilroy, Mrs Linda


Clark, Rt Hon Dr David (S Shields)
Godsiff, Roger


Clark, Dr Lynda (Edinburgh Pentlands)
Goggins, Paul



Gordon, Mrs Eileen


Clark, Paul (Gillingham)
Griffiths, Jane (Reading E)


Clarke, Tony (Northampton S)
Griffiths, Nigel (Edinburgh S)


Clelland, David
Griffiths, Win (Bridgend)


Clwyd, Ann
Grocott, Bruce


Coaker, Vernon
Gunnell, John


Coffey, Ms Ann
Hain, Peter


Cohen, Harry
Hall, Mike (Weaver Vale)


Corbett, Robin
Hamilton, Fabian (Leeds NE)






Hanson, David
Morris, Ms Estelle (B'ham Yardley)


Hepburn, Stephen
Morris, Rt Hon John (Aberavon)


Heppell, John
Mountford, Kali


Hesford, Stephen
Mowlam, Rt Hon Marjorie


Hill, Keith
Mudie, George


Hinchliffe, David
Mullin, Chris


Hoey, Kate
Murphy, Denis (Wansbeck)


Home Robertson, John
Naysmith, Dr Doug


Hope, Phil
Norris, Dan


Hopkins, Kelvin
O'Brien, Bill (Normanton)


Howarth, George (Knowsley N)
O'Brien, Mike (N Warks)


Howells, Dr Kim
O'Hara, Eddie


Hoyle, Lindsay
Olner, Bill


Hughes, Ms Beverley (Stretford)
O'Neill, Martin


Humble, Mrs Joan
Palmer, Dr Nick


Hutton, John
Pearson, Ian


Ingram, Adam
Perham, Ms Linda


Jackson, Ms Glenda (Hampstead)
Pickthall, Colin


Jackson, Helen (Hillsborough)
Pike, Peter L


Jamieson, David
Plaskitt, James


Jenkins, Brian
Pond, Chris


Johnson, Alan (Hull W & Hessle)
Pope, Greg


Johnson, Miss Melanie (Welwyn Hatfield)
Prentice, Ms Bridget (Lewisham E)



Prentice, Gordon (Pendle)


Jones, Helen (Warrington N)
Prosser, Gwyn


Jones, Ms Jenny (Wolverh'ton SW)
Purchase, Ken



Quinn, Lawrie


Jones, Jon Owen (Cardiff C)
Radice, Giles


Jones, Dr Lynne (Selly Oak)
Rammell, Bill


Jowell, Ms Tessa
Rapson, Syd


Keen, Ann (Brentford & Isleworth)
Reed, Andrew (Loughborough)


Kelly, Ms Ruth
Reid, Dr John (Hamilton N)


Kennedy, Jane (Wavertree)
Robertson, Rt Hon George (Hamilton S)


Khabra, Piara S



Kilfoyle, Peter
Robinson, Geoffrey (Cov'try NW)


King, Andy (Rugby & Kenilworth)
Roche, Mrs Barbara


King, Ms Oona (Bethnal Green)
Rooker, Jeff


Kingham, Ms Tess
Rooney, Terry


Ladyman, Dr Stephen
Rowlands, Ted


Lawrence, Ms Jackie
Ruane, Chris


Laxton, Bob
Ruddock, Ms Joan


Leslie, Christopher
Russell, Ms Christine (Chester)


Levitt, Tom
Ryan, Ms Joan


Lewis, Ivan (Bury S)
Savidge, Malcolm


Liddell, Mrs Helen
Sawford, Phil


Linton, Martin
Sedgemore, Brian


Lock, David
Shaw, Jonathan


Love, Andrew
Sheerman, Barry


McAvoy, Thomas
Sheldon, Rt Hon Robert


McCabe, Steve
Short, Rt Hon Clare


McCafferty, Ms Chris
Singh, Marsha


McCartney, Ian (Makerfield)
Skinner, Dennis


McDonnell, John
Smith, Angela (Basildon)


McGuire, Mrs Anne
Smith, Miss Geraldine (Morecambe & Lunesdale)


McIsaac, Shona



McLeish, Henry
Smith, Jacqui (Redditch)


McNulty, Tony
Smith, John (Glamorgan)


MacShane, Denis
Snape, Peter


Mactaggart, Fiona
Soley, Clive


McWalter, Tony
Southworth, Ms Helen


Mallaber, Judy
Spellar, John


Marek, Dr John
Squire, Ms Rachel


Marsden, Paul (Shrewsbury)
Starkey, Dr Phyllis


Marshall, Jim (Leicester S)
Steinberg, Gerry


Marshall-Andrews, Robert
Stewart, Ian (Eccles)


Meale, Alan
Stinchcombe, Paul


Merron, Gillian
Stoate, Dr Howard


Michie, Bill (Shef'ld Heeley)
Strang, Rt Hon Dr Gavin


Milburn, Alan
Straw, Rt Hon Jack


Miller, Andrew
Stringer, Graham


Moffatt, Laura
Stuart, Ms Gisela


Moonie, Dr Lewis
Sutcliffe, Gerry


Moran, Ms Margaret
Taylor, Rt Hon Mrs Ann (Dewsbury)


Morgan, Ms Julie (Cardiff N)



Morgan, Rhodri (Cardiff W)



Morley, Elliot






Thomas, Gareth (Clwyd W)
Williams, Rt Hon Alan (Swansea W)


Thomas, Gareth R (Harrow W)



Timms, Stephen
Williams, Alan W (E Carmarthen)


Todd, Mark
Williams, Mrs Betty (Conwy)


Touhig, Don
Wills, Michael


Truswell, Paul
Winnick, David


Turner, Dennis (Wolverh'ton SE)
Winterton, Ms Rosie (Doncaster C)


Turner, Dr Desmond (Kemptown)
Wise, Audrey


Turner, Dr George (NW Norfolk)
Wood, Mike


Twigg, Stephen (Enfield)
Woolas, Phil


Vaz, Keith
Worthington, Tony


Vis, Dr Rudi
Wright, Dr Tony (Cannock)


Walley, Ms Joan



Wareing, Robert N
Tellers for the Noes:


White, Brian
Mr. John McFall and



Mr. Kevin Hughes.

Question accordingly negatived.

Clause 12

FUNCTIONS OF EDUCATION ACTION FORUM

Amendment made: No. 85, in page 11, line 13, at end insert—
'(3A) Regulations may, in relation to the discharge by an Education Action Forum of any function of a governing body under sections 52 and 55(1) to (3), Schedule 16 or paragraph 26 of Schedule 17, make any such provision as may be made by an order under section 73 (application of employment law during financial delegation).'.—[Mr. Byers.]

Amendment proposed: No. 88, in page 11, line 13, at end insert—
'(3A) In discharging any function transferred to it under the provisions of subsection (2) of this section an Education Action Forum may enter a contract for the performance of that function with any party, whether from the public or private sector, who, in the opinion of the Education Action Forum, is a fit and proper party to discharge the function or functions covered by the contract.
(3B) Any party with whom the Education Action Forum enters a contract under the terms of subsection (3A) of this section (hereinafter referred to as "the contractor") shall be responsible for delivering the service defined in the contract with the Education Action Forum to the standard defined in the said contract and shall be permitted to acquire, employ, and manage, on terms to be determined by the contractor, such equipment, staff and other resources as he believes to be necessary to perform the duties defined in the contract.'.—[Mr. Dorrell.]

Question put, That the amendment be made:—

The House divided: Ayes 128, Noes 328.

Division No. 200]
[7.34 pm


AYES


Ainsworth, Peter (E Surrey)
(Chipping Barnet)


Amess, David
Chope, Christopher


Ancram, Rt Hon Michael
Clappison, James


Arbuthnot, James
Clark, Rt Hon Alan (Kensington)


Atkinson, David (Bour'mth E)
Clark, Dr Michael (Rayleigh)


Atkinson, Peter (Hexham)
Clarke, Rt Hon Kenneth (Rushcliffe)


Beggs, Roy



Bercow, John
Clifton-Brown, Geoffrey


Beresford, Sir Paul
Collins, Tim


Boswell, Tim
Cran, James


Brady, Graham
Curry, Rt Hon David


Brazier, Julian
Davies, Quentin (Grantham)


Brooke, Rt Hon Peter
Davis, Rt Hon David (Haltemprice)


Browning, Mrs Angela
Dorrell, Rt Hon Stephen


Bruce, Ian (S Dorset)
Duncan, Alan


Burns, Simon
Duncan Smith, Iain


Butterfill, John
Evans, Nigel


Cash, William
Faber, David


Chapman, Sir Sydney
Fallon, Michael






Flight, Howard
Norman, Archie


Forth, Rt Hon Eric
Ottaway, Richard


Fox, Dr Liam
Page, Richard


Garnier, Edward
Paice, James


Gibb, Nick
Pickles, Eric


Gill, Christopher
Prior, David


Gillan, Mrs Cheryl
Randall, John


Goodlad, Rt Hon Sir Alastair
Redwood, Rt Hon John


Gorman, Mrs Teresa
Robathan, Andrew


Gray, James
Robertson, Laurence (Tewk'b'ry)


Greenway, John
Roe, Mrs Marion (Broxbourne)


Grieve, Dominic
Rowe, Andrew (Faversham)


Gummer, Rt Hon John
Ruffley, David


Hague, Rt Hon William
St Aubyn, Nick


Hammond, Philip
Sayeed, Jonathan


Hawkins, Nick
Shephard, Rt Hon Mrs Gillian


Hayes, John
Shepherd, Richard


Heald, Oliver
Simpson, Keith (Mid-Norfolk)


Hogg, Rt Hon Douglas
Soames, Nicholas


Horam, John
Spicer, Sir Michael


Howarth, Gerald (Aldershot)
Spring, Richard


Hunter, Andrew
Steen, Anthony


Jack, Rt Hon Michael
Streeter, Gary


Jackson, Robert (Wantage)
Swayne, Desmond


Jenkin, Bernard
Syms, Robert


Johnson Smith, Rt Hon Sir Geoffrey
Tapsell, Sir Peter



Taylor, Ian (Esher & Walton)


Key, Robert
Taylor, John M (Solihull)


Kirkbride, Miss Julie
Taylor, Sir Teddy


Laing, Mrs Eleanor
Townend, John


Lait, Mrs Jacqui
Trend, Michael


Lansley, Andrew
Tyrie, Andrew


Leigh, Edward
Viggers, Peter


Letwin, Oliver
Walter, Robert


Lewis, Dr Julian (New Forest E)
Wardle, Charles


Lidington, David
Wells, Bowen


Lilley, Rt Hon Peter
Whitney, Sir Raymond


Lloyd, Rt Hon Sir Peter (Fareham)
Whittingdale, John


Luff, Peter
Widdecombe, Rt Hon Miss Ann


MacGregor, Rt Hon John
Wilkinson, John


MacKay, Andrew
Willetts, David


McLoughlin, Patrick
Winterton, Mrs Ann (Congleton)


Maginnis, Ken
Winterton, Nicholas (Macclesfield)


Malins, Humfrey
Woodward, Shaun


Mawhinney, Rt Hon Sir Brian
Young, Rt Hon Sir George


May, Mrs Theresa



Moss, Malcolm
Tellers for the Ayes:


Nicholls, Patrick
Sir David Madel and



Mr. Stephen Day.


NOES


Ainger, Nick
Blears, Ms Hazel


Ainsworth, Robert (Cov'try NE)
Blizzard, Bob


Alexander, Douglas
Blunkett, Rt Hon David


Allan, Richard
Borrow, David


Allen, Graham
Bradley, Keith (Withington)


Anderson, Janet (Rossendale)
Bradshaw, Ben


Armstrong, Ms Hilary
Brake, Tom


Ashdown, Rt Hon Paddy
Brand, Dr Peter


Ashton, Joe
Breed, Colin


Atherton, Ms Candy
Brinton, Mrs Helen


Atkins, Charlotte
Brown, Rt Hon Nick (Newcastle E)


Austin, John
Brown, Russell (Dumfries)


Baker, Norman
Browne, Desmond


Ballard, Mrs Jackie
Bruce, Malcolm (Gordon)


Barnes, Harry
Burden, Richard


Beard, Nigel
Burgon, Colin


Bell, Martin (Tatton)
Burnett, John


Bell, Stuart (Middlesbrough)
Burstow, Paul


Benn, Rt Hon Tony
Butler, Mrs Christine


Bennett, Andrew F
Byers, Stephen


Benton, Joe
Cable, Dr Vincent


Berry, Roger
Campbell, Alan (Tynemouth)


Best, Harold
Campbell, Mrs Anne (C'bridge)


Betts, Clive
Campbell, Menzies (NE Fife)


Blackman, Liz
Campbell, Ronnie (Blyth V)





Canavan, Dennis
Gilroy, Mrs Linda


Caplin, Ivor
Godsiff, Roger


Casale, Roger
Goggins, Paul


Caton, Martin
Gordon, Mrs Eileen


Cawsey, Ian
Gorrie, Donald


Chaytor, David
Griffiths, Jane (Reading E)


Chidgey, David
Griffiths, Nigel (Edinburgh S)


Church, Ms Judith
Griffiths, Win (Bridgend)


Clapham, Michael
Grocott, Bruce


Clark, Rt Hon Dr David (S Shields)
Gunnell, John


Clark, Dr Lynda (Edinburgh Pentlands)
Hain, Peter



Hall, Mike (Weaver Vale)


Clark, Paul (Gillingham)
Hamilton, Fabian (Leeds NE)


Clarke, Tony (Northampton S)
Hancock, Mike


Clelland, David
Hanson, David


Clwyd, Ann
Harman, Rt Hon Ms Harriet


Coaker, Vernon
Harris, Dr Evan


Coffey, Ms Ann
Harvey, Nick


Cohen, Harry
Hepburn, Stephen


Corbett, Robin
Heppell, John


Corbyn, Jeremy
Hesford, Stephen


Corston, Ms Jean
Hill, Keith


Cotter, Brian
Hinchliffe, David


Cox, Tom
Hoey, Kate


Cranston, Ross
Home Robertson, John


Crausby, David
Hope, Phil


Cryer, Mrs Ann (Keighley)
Hopkins, Kelvin


Cryer, John (Hornchurch)
Howarth, George (Knowsley N)


Cummings, John
Howells, Dr Kim


Cunningham, Jim (Cov'try S)
Hoyle, Lindsay


Dafis, Cynog
Hughes, Ms Beverley (Stretford)


Dalyell, Tam
Hughes, Simon (Southwark N)


Darvill, Keith
Humble, Mrs Joan


Davey, Edward (Kingston)
Hutton, John


Davey, Valerie (Bristol W)
Ingram, Adam


Davidson, Ian
Jackson, Ms Glenda (Hampstead)


Davies, Rt Hon Denzil (Llanelli)
Jackson, Helen (Hillsborough)


Davies, Geraint (Croydon C)
Jamieson, David


Davies, Rt Hon Ron (Caerphilly)
Jenkins, Brian


Davis, Terry (B'ham Hodge H)
Johnson, Alan (Hull W & Hessle)


Dawson, Hilton
Johnson, Miss Melanie (Welwyn Hatfield)


Dismore, Andrew



Dobbin, Jim
Jones, Helen (Warrington N)


Donohoe, Brian H
Jones, Ms Jenny (Wolverh'ton SW)


Dowd, Jim



Drown, Ms Julia
Jones, Jon Owen (Cardiff C)


Dunwoody, Mrs Gwyneth
Jones, Dr Lynne (Selly Oak)


Eagle, Angela (Wallasey)
Jones, Nigel (Cheltenham)


Eagle, Maria (L'pool Garston)
Jowell, Ms Tessa


Edwards, Huw
Keen, Ann (Brentford & Isleworth)


Efford, Clive
Keetch, Paul


Ellman, Mrs Louise
Kelly, Ms Ruth


Ennis, Jeff
Kennedy, Charles (Ross Skye)


Etherington, Bill
Kennedy, Jane (Wavertree)


Field, Rt Hon Frank
Khabra, Piara S


Fisher, Mark
Kilfoyle, Peter


Fitzsimons, Lorna
King, Andy (Rugby & Kenilworth)


Flint, Caroline
King, Ms Oona (Bethnal Green)


Flynn, Paul
Kingham, Ms Tess


Follett, Barbara
Kirkwood, Archy


Foster, Don (Bath)
Lawrence, Ms Jackie


Foster, Michael Jabez (Hastings)
Laxton, Bob


Foster, Michael J (Worcester)
Leslie, Christopher


Foulkes, George
Levitt, Tom


Fyfe, Maria
Lewis, Ivan (Bury S)


Gapes, Mike
Liddell, Mrs Helen


George, Andrew (St Ives)
Linton, Martin


George, Bruce (Walsall S)
Livsey, Richard


Gerrard, Neil
Lock, David



Love, Andrew



McAvoy, Thomas



McCabe, Steve



McCafferty, Ms Chris



McCartney, Ian (Makerfield)



McDonagh, Siobhain



McDonnell, John






McGuire, Mrs Anne
Ryan, Ms Joan


McIsaac, Shona
Sanders, Adrian


McLeish, Henry
Savidge, Malcolm


Maclennan, Rt Hon Robert
Sawford, Phil


McNulty, Tony
Sedgemore, Brian


MacShane, Denis
Shaw, Jonathan


Mactaggart, Fiona
Sheerman, Barry


McWalter, Tony
Sheldon, Rt Hon Robert


Mallaber, Judy
Short, Rt Hon Clare


Marek, Dr John
Singh, Marsha


Marsden, Paul (Shrewsbury)
Skinner, Dennis


Marshall, Jim (Leicester S)
Smith, Angela (Basildon)


Marshall-Andrews, Robert
Smith, Miss Geraldine (Morecambe & Lunesdale)


Meale, Alan



Merron, Gillian
Smith, Jacqui (Redditch)


Michael, Alun
Smith, John (Glamorgan)


Michie, Bill (Shef'ld Heeley)
Smith, Sir Robert (W Ab'd'ns)


Michie, Mrs Ray (Argyll & Bute)
Snape, Peter


Milburn, Alan
Soley, Clive


Miller, Andrew
Southworth, Ms Helen


Moffatt, Laura
Spellar, John


Moonie, Dr Lewis
Squire, Ms Rachel


Moran, Ms Margaret
Starkey, Dr Phyllis


Morgan, Ms Julie (Cardiff N)
Steinberg, Gerry


Morgan, Rhodri (Cardiff W)
Stewart, Ian (Eccles)


Morley, Elliot
Stinchcombe, Paul


Morris, Ms Estelle (B'ham Yardley)
Stoate, Dr Howard


Morris, Rt Hon John (Aberavon)
Strang, Rt Hon Dr Gavin


Mountford, Kali
Straw, Rt Hon Jack


Mowlam, Rt Hon Marjorie
Stringer, Graham


Mudie, George
Stuart, Ms Gisela


Mullin, Chris
Sutcliffe, Gerry


Murphy, Denis (Wansbeck)
Taylor, Rt Hon Mrs Ann (Dewsbury)


Naysmith, Dr Doug



Norris, Dan
Taylor, Matthew (Truro)


Oaten, Mark
Thomas, Gareth (Clwyd W)


O'Brien, Bill (Normanton)
Thomas, Gareth R (Harrow W)


O'Brien, Mike (N Warks)
Timms, Stephen


O'Hara, Eddie
Todd, Mark


Olner, Bill
Touhig, Don


O'Neill, Martin
Truswell, Paul


Öpik, Lembit
Turner, Dennis (Wolverh'ton SE)


Palmer, Dr Nick
Turner, Dr Desmond (Kemptown)


Pearson, Ian
Turner, Dr George (NW Norfolk)


Perham, Ms Linda
Twigg, Stephen (Enfield)


Pickthall, Colin
Tyler, Paul


Pike, Peter L
Vaz, Keith


Plaskitt, James
Vis, Dr Rudi


Pond, Chris
Wallace, James


Pope, Greg
Walley, Ms Joan


Prentice, Ms Bridget (Lewisham E)
Wareing, Robert N


Prentice, Gordon (Pendle)
Webb, Steve


Prosser, Gwyn
White, Brian


Purchase, Ken
Wicks, Malcolm


Quinn, Lawrie
Wigley, Rt Hon Dafydd


Radice, Giles
Williams, Rt Hon Alan (Swansea W)


Rammell, Bill



Rapson, Syd
Williams, Alan W (E Carmarthen)


Reed, Andrew (Loughborough)
Williams, Mrs Betty (Conwy)


Reid, Dr John (Hamilton N)
Willis, Phil


Rendel, David
Wills, Michael


Robertson, Rt Hon George (Hamilton S)
Winnick, David



Winterton, Ms Rosie (Doncaster C)


Robinson, Geoffrey (Cov'try NW)
Wise, Audrey


Roche, Mrs Barbara
Wood, Mike


Rooker, Jeff
Woolas, Phil


Rooney, Terry
Worthington, Tony


Rowlands, Ted
Wright, Dr Tony (Cannock)


Ruane, Chris



Ruddock, Ms Joan
Tellers for the Noes:


Russell, Bob (Colchester)
Mr. John McFall and


Russell, Ms Christine (Chester)
Mr. Kevin Hughes.

Question accordingly negatived

Clause 13

DISAPPLICATION OF PAY AND CONDITIONS ORDER IN RELATION TO TEACHERS AT PARTICIPATING SCHOOLS

Amendment made: No. 86, in page 11, line 43, leave out 'shall' and insert 'may'.—[Mr. Byers.]

New clause 1

ARRANGEMENTS FOR GOVERNMENT OF NEW SCHOOLS

—(1) Where proposals for the establishment of a maintained school fall to be implemented under paragraph 5 or 10 of Schedule 6, the local education authority shall make arrangements providing for the constitution of a temporary governing body for the school.

(2) Once constituted in accordance with arrangements made under subsection (1) the temporary governing body shall continue in existence until such time as the governing body are constituted for the school under an instrument of government.

(3) The local education authority shall secure that the governing body are so constituted—

(a) as soon as is reasonably practicable after the time when the requirement for there to be an instrument of government for the school takes effect in accordance with subsection (4), and
(b) in any event not later than the last day of the term in which the school first admits pupils.

(4) The requirement for there to be an instrument of government for a school (imposed by section 36) shall take effect in relation to a school falling within subsection (1) above as from the school opening date; and for the purposes of this Part proposals for the establishment of a maintained school shall be taken to be implemented on that date.

(5) Regulations may make provision with respect to—

(a) the making and termination of arrangements for the constitution of temporary governing bodies, including such arrangements made in anticipation of proposals falling to be implemented as mentioned in subsection (1);
(b) the constitution, meetings and proceedings of temporary governing bodies; the payment of allowances to temporary governors, and the appointment of clerks to such bodies;
(c) the transition from a temporary governing body to a governing body constituted under an instrument of government; and
(d) such other matters relating to temporary governing bodies as the Secretary of State considers appropriate.

(6) Regulations under subsection (5) may, in connection with any matters falling within that subsection—

(a) modify any provision made by or under any of Schedules 9 to 12;
(b) apply any such provision with or without modifications;
(c) make provision corresponding or similar to any such provision.

(7) Subject to subsection (8), the temporary governing body of a school shall be treated for the purposes of the Education Acts as if they were the governing body during the period—

(a) beginning with the school opening date, and
(b) ending with the time when the governing body are constituted for the school under an instrument of government;

and for the purposes of sections 495 to 498 of the Education Act 1996 (general default powers of the Secretary of State) the temporary governing body of a school shall also be so treated at any time falling before the school opening date.

(8) Despite subsection (7), nothing in any of the following provisions, namely—

(a) section 35,
(b) section 36(1) or (2), or
(c) (subject to any regulations made by virtue of subsection (5)) any of Schedules 9 to 12,

applies to any temporary governing body.

(9) In this Part "school opening date", in relation to a new maintained school, means the date when the school first admits pupils.'.—[Mr. Byers.]

Brought up, and read the First time.

Mr. Byers: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Alan Haselhurst): With this, it will be convenient to discuss Government amendments Nos. 4, 5, 9, 1, 81, 6 to 8, 3, 14 to 22, 66, 67, 11, 23, 24, 10, 2 and 28.

Mr. Byers: It gives me great pleasure to deal in detail with the new clause and each of the Government amendments.
New clause 1 and Government amendments Nos. 1 to 11 and 81 to 82 concern the governance of new schools and set out in greater detail the position of temporary governing bodies of new schools. The greater clarity provided by new clause 1 and the Government amendments will help both governing bodies and local education authorities.
Government amendments Nos. 14 to 24 provide for transitional arrangements so that we can ensure a speedy and smooth transition when governing bodies are set up and we move to the new structure under the Bill.
Government amendments Nos. 28 and 67 concern expenses for governors. Under schedule 11, regulations may allow governors of schools with delegated budgets to be paid expenses, other than for travel and subsistence, if the governing body believes that to be appropriate. The amendments allow for regulations to give local education authorities the same latitude in their schemes to pay expenses along similar lines.
Government amendment No. 66 concerns meetings and proceedings of governing bodies, and allows governing bodies to regulate their own meetings and proceedings on any aspect not covered by the regulations.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 2

RATING OF MAINTAINED SCHOOLS

'.—(1) For the purposes of Part III of the Local Government Finance Act 1988 (non-domestic rating) the occupier of any hereditament so far as consisting of the premises of a maintained school shall be taken to be—

(a) the local education authority, where it is a community, voluntary controlled or community special school; or
(b) the governing body, where it is a foundation, voluntary aided or foundation special school.

(2) In section 43(6) or 47(2)(a) of that Act (mandatory and discretionary rate relief) any reference to trustees for a charity includes the governing body of a foundation, voluntary aided or foundation special school.'.—[Mr. Byers.]

Brought up, and read the First time.

Mr. Byers: I beg to move, That the clause be read a Second time.
The new clause concerns rate relief. It does not affect the existing provisions for rates which would be outside the Bill's scope. It simply mirrors the existing provisions as they affect schools and simply rolls forward the existing arrangements into the new framework. It does not affect schools themselves financially, but simply clarifies the position and introduces a degree of certainty which the Government feel will be of benefit. This is a technical new clause.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 3

CONTROL OF DISPOSALS OR CHANGING USE OF SCHOOL PLAYING FIELDS

'.—(1) Except with the consent of the Secretary of State, a body to whom this subsection applies shall not dispose of any playing fields—

(a) which are, immediately before the date of the disposal, used by a maintained school for the purposes of the school, or
(b) which are not then so used but have been so used at any time within the period of 10 years ending with that date.

(2) Subsection (1) applies—

(a) to a local authority; and
(b) in any case where the consent of the Secretary of State is not required to any such disposal by virtue of either of paragraphs 1 and 2 of Schedule 22—

(i) to the governing body of a maintained school, and
(ii) to a foundation body.

(3) Except with the consent of the Secretary of State, a local authority shall not take any action (other than the making of a disposal falling within subsection (1)) which is intended or likely to result in a change of use of any playing fields—

(a) which are, immediately before the date when the action is taken, used by a maintained school for the purposes of the school, or
(b) which are not then so used but have been so used at any time within the period of 10 years ending with that date,

whereby the playing fields will be used for purposes which do not consist of or include their use as playing fields by such a school for the purposes of the school.

(4) Subsection (3) does not, however, apply where the land in question will, on a change of use falling within that subsection, become used in connection with the provision by a local authority of educational facilities for a maintained school or any recreational facilities.

(5) For the purposes of this section the Secretary of State's consent may be given in relation to a particular disposal or change of use or generally in relation to disposals or changes of use of a particular description, and in either case may be given subject to conditions.

(6) This section has effect despite anything in section 123 or 127 of the Local Government Act 1972 (general power to dispose of land) or in any other enactment; and any consent which a local authority are required to obtain by virtue of this section shall be in addition to any consent required by virtue of either of those sections.

(7) In this section—

"local authority" includes a parish council;

"playing fields" means land in the open air which is provided for the purposes of physical education or recreation, other than any prescribed description of such land.

(8) For the purposes of this section any reference to a maintained school includes, in relation to any time falling before the appointed day, a reference to the school as—

(a) a county, voluntary or maintained special school, or
(b) a grant-maintained or grant-maintained special school, within the meaning of the Education Act 1996.

(9) Nothing in this section applies in relation to Wales.'.—[Mr. Blunkett.]

Brought up, and read the First time.

The Secretary of State for Education and Employment (Mr. David Blunkett): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this it will be convenient to discuss Government amendments Nos. 77, 76 and 78.

Mr. Blunkett: The new clause is intended to fulfil another of our manifesto commitments, this time to ensure that the wholesale sell-off of playing fields is at last put to an end.
We have agreement across the House. In 1991, the then Department of Education and Science went out to consultation; seven years on, that consultation is gradually coming to an end. The previous Prime Minister, the right hon. Member for Huntingdon (Mr. Major), promised to put a stop to the sale of playing fields, having sold 5,000 of them over the years. In fact, about 40 playing fields a month are still being lost to us. Therefore, it is with great pleasure that, tonight, we can join together to say that enough is enough, and today is the day when we agree to put a stop to this environmental vandalism.
In rejoicing in doing that, we can also ensure that common sense prevails. Where it is appropriate for a swap to be done to provide facilities, that can be agreed. Where the criteria need to be worked out, that can be done in conjunction with the Sports Council, the National Playing Fields Association and others. We can apply common sense, work together, ensure that everybody gains, and provide children with adequate facilities for play and for sport. We must ensure that the environment in which they find themselves is acceptable as we approach a new century.
As I am totally against waffle, I shall sit down.

Mr. Dorrell: I am as opposed as the Secretary of State to waffle, so I do not propose to speak for more than a few moments on the new clause. The right hon. Gentleman correctly anticipated the reaction of the Conservative party. I welcome the provision being written into the law, not least for the various reasons given by the right hon. Gentleman relating to the history of the proposal during the lifetime of the Conservative Government.
In my year as Secretary of State for National Heritage, I was responsible for the early drafting of a White Paper that was then published by my successor, and which contained exactly this proposal within it. I am pleased to support the new clause.

Mr. Paul Keetch: The Liberal Democrats will not engage in waffle on this subject, either. However, I want to make a few brief remarks.
The physical fitness of those undergoing education is vital. We are concerned that so many playing fields have been sold, but a number of swimming pools are also being closed. We all know of examples of that in our constituencies.
When I visited the Army recently in Germany, I was told that the physical fitness of new recruits is bad. One reason for that is the selling of playing fields. We must remember why playing fields are sold—to raise cash because schools are short of money. The underlying point is that if schools are not to be forced to sell them, they must be properly financed and receive the right amount of support from the Exchequer. We hope that that will be the case under this new Government.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 4

GRANT MAINTAINED SCHOOLS

'.—(1) Where a school is a grant maintained school within the meaning of the Education Act 1996 at the beginning of the 1998–99 school year—

(a) the provisions of this clause shall have effect for prescribing the procedure for altering the school's status so that it is no longer a grant maintained school; and
(b) the status of the school as a grant maintained school shall not be so altered except in accordance with the provisions of this clause.

(2) The Secretary of State may by regulations make provision for ballots of parents to be held, at their request, for determining whether the grant maintained school to which such a ballot relates should retain its status as a grant maintained school.

(3) Ballot regulations may make provision—

(a) for determining the parents who are eligible to request and vote in a ballot under this section, provided that such determination shall include only parents of children for the time being in the school or who have accepted an offer of a place in the school;
(b) requiring a request for such a ballot to be made by means of a petition signed by such number eligible parents as may be specified in or determined in accordance with the regulations;
(c) prescribing the form of any petition and other requirements (whether as to the procedure to be followed or otherwise) which are to be complied with in relation to any such petition;
(d) prescribing the body ("the designated body") to which any such petition is to be sent and which, under arrangements made by Secretary of State, is to—

(i) make the arrangements for the holding of ballots under this section, and
(ii) discharge such other functions with respect to such petitions and the holding of such ballots as may be prescribed (which may include the determination of any question arising as to the validity of any request for a ballot);


(e) requiring prescribed bodies or persons, or bodies or persons falling within any prescribed category—

(i) to provide the designated body or any other person with any prescribed information requested by that body or person, or
(ii) to publish prescribed information in such manner as may be prescribed;


(f) prescribing the terms of the question on which a ballot under this section is to be held and the manner in which such a ballot is to be conducted;


(g) specify how the result of such a ballot is to be ascertained;
(h) enabling the Secretary of State, in any prescribed circumstances, to declare a previous ballot under this section void and require the holding of a fresh ballot;
(i) requiring anything falling to be done under the regulations to be done within such period as may be specified in or determined in accordance with the regulations;

(4) Ballot regulations may provide for a request for a ballot under this section to be made, in any prescribed circumstances, by means of two or more petitions.

(5) The information required to be provided in pursuance of subsection (3)(e) may include the names and addresses of parents of any prescribed description.

(6) Where—

(a) a ballot has been held under this section, and
(b) the result of the ballot was to the effect that the schools or school in question should retain grant-maintained status,

no further ballot relating to the schools or school shall be held under this section within five years.

(7) An authority or body to whom this subsection applies shall not—

(a) publish any material which, in whole or in part, appears designed to influence the result of a ballot under this section, or
(b) give any financial or other assistance to a person for the publication of material, which the authority or body are prohibited by this subsection from publishing themselves, or
(c) otherwise incur any expenditure, or give any assistance, for the purpose of influencing the outcome of a ballot under this section.

(8) Subsection (7) applies to—

(a) any local education authority, and
(b) the governing body of any maintained school within the meaning of section 95 and in the case of the governing body of such a school which has a delegated budget within the meaning of Part II of this Act (or, in relation to any time before the appointed day, Part II of the Education Act 1996) the reference to expenditure in subsection (7)(c) is to expenditure out of the school's budget share.

(9) In this section, "ballot regulations" means regulations made under this section.'.—[Mr. Darrell.]

Brought up, and read the First time.

Mr. Dorrell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss amendment No. 113, in schedule 2, page 99, line 39, at end insert,
'except that no such school shall be allocated to a new category unless the change has been agreed to following a ballot under section (Grant Maintained Schools).'.

Mr. Dorrell: The House will recognise that new clause 4 deals with the principal occasion of the Bill. The Government would say that the purpose of the Bill is to raise school standards, and we all share that purpose—but the occasion of the Bill is the Government's determination to abolish grant-maintained schools. New clause 4 would offer some protection to those schools whose parents, through a parental ballot, have voted to accord to them

GM status. It would entrench their right to remain GM schools and prevent the Government from removing that status without first securing the consent of the parents.
In terms of the delivery of children's education, the new clause is the most important that we are likely to consider on Report. It goes to the heart of the central purpose that led the Government to introduce the Bill—the determination to abolish GM status.
When the Secretary of State introduced his White Paper in the summer, he included as one of the guiding principles of his education policy the proposition that standards matter more than structure. No one in the House should disagree with that principle. However, in the months since that White Paper, the right hon. Gentleman's policy has given the lie to any suggestion that it motivates the way in which, day to day, he carries out his functions.
The Bill is called the School Standards and Framework Bill and it devotes 50 clauses to establishing a new framework for the management of schools. The right hon. Gentleman's principle, when it is converted into legislation, amounts to the substitution of the word "framework" for the word "structure", and then a commitment to redesign the framework of the management of schools.
As my hon. Friend the Member for Maidenhead (Mrs. May) said, it is even more ironic than that. Through the Bill—the central purpose of which is the redesign of the framework for the management of schools—the Government are withdrawing the principles of local responsibility and accountability as they have been accorded to GM schools, which have used the opportunity to deliver successful education to their children. Yet in an earlier debate, the Minister for School Standards—with our support—wanted to introduce new flexibility and new opportunities to escape from over-prescriptive local education authority control for any school that opted into an education action zone.
It is extraordinary that, within the same Bill, the Secretary of State is asking the House to endorse two flatly contradictory principles—first, the principle of withdrawal of local responsibility and the reimposition of LEA control; and, secondly, the principle of enhanced flexibility and the removal of LEA control, where that can be shown to be in the interests of children.
We agree with the Secretary of State on his second principle; we disagree profoundly with him on his first. We believe that we can adduce arguments of practice and of principle to show that when the right hon. Gentleman seeks to reimpose and reintroduce over-prescriptive LEA control, he is wrong.
First, The right hon. Gentleman is wrong on the basis of the results published by his Department on the delivery of service by GM schools. In November last year, the Department for Education and Employment listed the 240 most improved schools in Britain. The Secretary of State was embarrassed by having to admit in interviews that, of the 240 schools that he listed, a third were grant maintained. It was pointed out to him that it was a bit of an own goal to issue a press release effectively praising schools whose status he was about to abolish. Eight of the top 20 schools on the list were grant maintained.

Mr. John Bercow: Will my right hon. Friend confirm that those figures are all the more striking


in view of the fact that grant-maintained schools account for only 6 per cent. of all state schools in England and Wales?

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Mr. Dorrell: That is exactly right. The Secretary of State says that grant-maintained schools account for about 20 per cent. of secondary schools, but, even taking that figure, the grant-maintained sector is over-represented by a factor of roughly two in the list of most improved schools.
In the table published in The Sunday Times following last year's A-level results, 50 of the 100 best-performing schools, including the top three, were grant maintained. That is the track record of the structure that the Secretary of State wants to abolish, while saying that standards are more important than structure. How can the two halves of his personality be reconciled?

Mr. Blizzard: Does the right hon. Gentleman attribute the success of those schools to good management and efficient use of their delegated budgets, or to the favoured funding that they received as against other schools in the same area, many of which lost funding as a result? If the answer is the former, that will be unaffected by the legislation; if it is the latter, most people would believe that our schools should be fairly funded.

Mr. Dorrell: The answer is the former, but the hon. Gentleman is completely wrong to say that it is unaffected by the Bill. If it were true that the Bill left the grant-maintained school with the same authority over its own affairs, and the same freedom to decide which resources are spent by the school and which are retained by the local education authority, I would have no problem with it; but that is not what the Bill delivers.
The Bill consciously and deliberately reasserts the principle that the grant-maintained school should receive the resources allocated by the local education authority after the authority has decided which resources to use within its own bureaucracy. That is the principle that the hon. Member for Waveney (Mr. Blizzard) will be asked to support. He may shake his head, but that is the principle in his party's manifesto.

Dr. George Turner: The right hon. Gentleman wants to defend what he regards as essential management powers. Which of those powers will not be available under the Government's proposals?

Mr. Dorrell: I am about to deal with exactly that subject. The House should concentrate not only on the results achieved by grant-maintained schools but on the principle that lay behind their establishment. The Government are asking their Back Benchers to throw over that principle and substitute the principle that the powers should be vested in the local education authority.
The Minister for School Standards says that it is his view that the key responsibility for the delivery of standards rests with the school. He is right to say that, but the problem is that he then advocates taking powers away from the school and vesting them in the LEA. The hon.

Member for North-West Norfolk (Dr. Turner) asked which powers. One was mentioned earlier: the power of the school to determine its own priorities.
The structure of the education development planning process that we discussed in Committee requires the school's targets to be agreed by the LEA, and the LEA's education development plan to be agreed by the Secretary of State. The Bill transfers power from the school to the LEA, but that power rests with the LEA only as long as the Secretary of State is satisfied, week by week and month by month, with the way in which the service is managed.
The Secretary of State is seeking powers over the maintained sector that are indistinguishable in principle from the powers that the Secretary of State for Health has over the national health service. The key difference is that the national health service was always intended to be a national service, accountable to Parliament through the Secretary of State, whereas we sought, first, to have a school system that is accountable through the local education authority—an elected assembly to a local body—and then, more recently, to have direct accountability from individual schools, through the governing body, to parents and the local community.

Dr. George Turner: I fail to understand how the Secretary of State's insisting on the setting of standards and targets interferes with a governing body's ability to achieve higher standards.

Mr. Dorrell: The hon. Gentleman is now asking me a totally different question. He asked how power was taken out of the school, and I answered his question. The school should be responsible for deciding its priorities for the community that it serves, but the Bill takes that power out of the school and vests it either in the LEA or in the Secretary of State.
It is not true, as the hon. Member for Waveney loves to argue, that there was a distortion of resources in favour of grant-maintained schools. Resources were allocated to the school rather than to the local education authority, and it was for the school to decide whether they should be used within the school or to buy services from elsewhere in the bureaucracy.

Mr. Blizzard: rose—

Mr. Dorrell: Before the hon. Gentleman embarrasses himself again, he should remember the words of the Minister for School Standards, who is on the record as saying that he wants to raise the level of delegation in the rest of the maintained sector to that achieved in grant-maintained schools.
If that is the right principle, why abolish grant-maintained schools? Why not leave them there and raise the other schools to their standard? Why begin the process by levelling down, rather than—as the Minister for School Standards might have said, but did not—using the grant-maintained schools as a gold standard by which to raise the attainment of other schools?

Mr. Laurence Robertson: Does my right hon. Friend agree that it may well have appeared that grant-maintained schools got extra money, but that


they could spend what they needed to spend only because they were given directly money that many local education authorities had not passed on as they should have done?

Mr. Dorrell: My hon. Friend is entirely right. It is a question whether decisions about resources should be made by LEAs, or should be vested in schools and governing bodies. Sometimes, schools and governing bodies use resources to buy services from LEAs—and that is fine by us, if it is in the best interests of the school concerned and the children in it. We argue—and it is the implication, which is never faced up to, of the remarks of the Minister for School Standards—that resources should go into the school. It should then be for the head teacher principally—but also for the teaching staff and the governing body—to make decisions about how those resources can best be used.

Mr. Blizzard: Will the right hon. Gentleman give way?

Mr. Dorrell: I will give way once more.

Mr. Blizzard: I thank the right hon. Gentleman. In the light of what he has said, how does he explain comments frequently made to me by head teachers of schools that became grant maintained? Effectively, they said, "I did it for the money." Head teachers often persuaded their governing bodies to become grant maintained in pursuit of extra money—not just a greater share of the annual revenue resource taken from the LEAs, but priority in attaining capital funding from the Government. Most of those schools took the carrot that was dangled before them—extra capital resources—in what appeared to be, in the light of what the right hon. Gentleman has said, a deliberate attempt to break down LEAs altogether.

Mr. Dorrell: The hon. Gentleman says that they did it for the money. In fact, they did it to control the budget that was available for the children anyway. I say that the budget was available anyway, but, if the schools were not grant maintained, the money did not get into the schools.
Labour Members love to claim that extra resources went towards the education of children in grant-maintained schools, but that is not true. As Labour Members know very well, resources were divided on the basis of local spending decisions. That is why, in the early stages of grant-maintained status, spending levels in individual GM schools with similar needs varied: they reflected the circumstances of the LEA. The hon. Gentleman's interlocutors said, "We did it for the money" because they wanted to control the money that they knew was supposed to deliver education to their children, but which, in their opinion, was not being used properly.
It is true that many GM schools have used the extra authority that they have had over resources to improve their capital stock, but they have been able to do that because the money that was previously stuck in the bureaucracy got to the schools, and the schools were able to make decisions about the best use of that money.
The Government are committed to the abolition of GM schools. I remind Labour Members who defend the abolition of GM schools that the Bill introduces the same principles in regard to education action zones. At least we are consistent: we voted for the principles regarding education action zones against which Labour Members

have just voted, and we shall vote for the principles regarding grant-maintained schools as well. We shall do so because the principles are right, whether we refer to education action zones or to grant-maintained schools.
Labour Members are wrong in their vendetta against grant-maintained schools. They are wrong because they have not looked at the evidence that such schools are successful, and they are wrong in principle. They are not adhering to a principle that the Minister for School Standards loves to proclaim, but then violates in the way in which he discharges his function: maximum delegation. When the Minister proclaims maximum delegation, he is right; when he pursues a policy that inhibits and, indeed, reverses his principle for grant-maintained schools, he is wrong.
We do not claim that the grant-maintained system was perfect or incapable of improvement; nor have we ever said that grant-maintained status is right for all schools. What we say is that grant-maintained status moved power into schools, and that the result was a dramatic improvement in the education that those schools gave children.
We make another key case. Grant-maintained schools do not exist as a result of a fiat issued by the Secretary of State or his predecessors; they do not exist as a result of a private agreement between heads and governors, or local education authorities. They exist within the law as it currently stands, for a simple reason: parents supported the principle of grant-maintained status in a ballot.
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That is what the new clause proposes. Given the Government's determination to remove the concept of grant-maintained schools from the statute book, the least we should do is accord schools that voted for grant-maintained status within the last 10 years the same protection that the Government are prepared to accord to grammar schools. The Government's attitude to grammar schools and grant-maintained schools is remarkably consistent. Both are successful institutions, and there is clear evidence that they have widespread parental support, but the Government are plainly opposed to both. The grant-maintained sector is uniquely exposed, however. At least the Government have said, in principle, that they will not abolish grammar schools without securing consent in a ballot.
The new clause applies principles which, as I said in Committee, I do not find hugely attractive in themselves, but which provide some protection for grammar schools. I simply ask this question: why do the Government not give grant-maintained schools, when parents have voted for GM status, the protection that they are prepared to accord to grammar schools? That is the challenge which the new clause presents to the Secretary of State. I hope that, in his reply, he will recognise this: a school that can claim in its support, first, that the system works because it delivers high standards, secondly, that it is right in principle because it reflects the principle that the right hon. Gentleman himself is introducing in education action zones, thirdly, that it is backed by parents, governors and teachers, and, fourthly, that it has already been supported in a ballot of parents is entitled to expect the protection of one of Her Majesty's Ministers. The Secretary of State should not have the power to abolish grant-maintained


schools unless he can show that parents have changed their minds, and have voted in a ballot to reverse the decision that they made in a ballot only a few years ago.

Mrs. May: My right hon. Friend the Member for Charnwood (Mr. Dorrell) has outlined the ultimate irony that lies behind the Bill very well. It is clear that the Bill is fundamentally about changing the framework of schools. Whatever the Government say about its being a Bill to raise standards, most of it is about school structures. It is about changing the framework of schools; it is about development plans for organisation committees. It is not about standards in themselves, but about the structure within which schools operate, and the sort of schools that we have under local education authorities and education action zones.
The irony is that, in two ways, the Bill discriminates against grant-maintained schools—as my right hon. Friend the Member for Charnwood pointed out. On the one hand, the Government say, "Fine. We may not want to create new grammar schools"—we disagree with that, but it is the Government's position—"but if parents have said that they want grammar schools to stay, we will allow it. As for grant-maintained schools, no thank you—goodbye."
As for education action zones, the Government envisage certain powers in an innovative new world. The Minister for School Standards confirmed that in a debate on another new clause. The Government look ahead to the provision of education in the new millennium. They want radical thinking from schools and, to bring it about, they will set up a structure enabling schools to free themselves from LEAs, to apply different terms and positions to the employment of teachers and to have extra, favoured funding. Those are the principles that lie behind education action zones. However, the principles that schools should be free from local education authorities and have the freedom to say "No, we do not want to retain standard terms and conditions for teachers", are precisely the same principles that were applied to grant- maintained schools.
The Government are saying, "Fine, we accept that schools might not want to be under the local education authority and might want to have new thinking. We think that that's a good idea, but they can do it only if they do it under the structure that we set up and not under the previous structure. If it is a Labour idea we like it, but we don't like the idea if it was introduced by the previous Government, despite the fact that they are exactly the same."
There is also a great sadness behind the Bill.

Mr. Bercow: It is small-minded.

Mrs. May: Yes, that is an excellent description of the Bill. In Standing Committee, we were told that the Bill is about looking forward to the new millennium, about free thinking and about saying that the structure of schools under a local education authority is not right. Let us make no bones about it: the Bill will lead to the demise of local education authorities. By establishing education action zones, Ministers are saying that they want to abolish LEAs, but that they do not want to come out and say so. They will create a new structure and abolish LEAs by subterfuge.
In Committee, the Under-Secretary of State for Education and Employment, the hon. Member for Birmingham, Yardley (Ms Morris), made it absolutely clear that the Government think that, very soon, there may be 400 education action zones. The Government have created the new structure not to deal with failing schools but, ultimately, to take over the education structure of the United Kingdom. That is how the Government perceive the way forward to the new millennium.

Dr. George Turner: Does the hon. Lady acknowledge that the GM experiment was divisive and that it—unlike action zones—fostered competition rather than co-operation? Despite what she says, by no means will action zones be anti-LEA. They are a way forward. Now we shall be able to get on with raising standards, rather than continuing the sterile debate of the past 10 years on the GM experiment.

Mrs. May: That intervention was up to the hon. Gentleman's usual standard. He said that it was divisive to give a school GM status, but he thinks that it will not be divisive if schools band together as education action zones and receive extra Government funding. He has defeated his own argument.
I should like to disabuse the hon. Member for North-West Norfolk (Dr. Turner), and suggest that he think through very carefully the implications of the provisions that he has voted for in the Bill. He should spend some time thinking about the likely ultimate result of the education action zone experiment. In Committee, Ministers said that, in the new millennium, the modern school structure and modern education in modern Britain would be education action zone led and not local education authority led. Ministers made that quite clear in our Standing Committee debates, and I suggest that the hon. Gentleman should go away and have another look at those proceedings. Ministers' statements on that point were very interesting.
The hon. Member for North-West Norfolk and other Labour Members have voted for the concept of schools being freed from local education authorities, but they are saying that schools can do that only if they are in an education action zone and are not grant maintained. Grant-maintained schools were very successful precisely because they gave power to schools to make decisions on their own future and on how to provide education in those schools, without being under an LEA's authoritative hand.

Mr. Bercow: Is not the extraordinary illogicality of the Government's position that failing schools can be freed from the authority of local education authorities, but that successful schools cannot be so freed bizarre, even by new Labour standards?

Mrs. May: The Government have moved forward and accepted our argument, as they will allow successful schools to become part of an education action zone and thereby free from the local education authority. However, my hon. Friend is absolutely right in saying that Ministers believe that, whereas groups of failing schools should be given those freedoms, successful grant-maintained schools must have those freedoms removed.

Mr. Hayes: Does my hon. Friend acknowledge that, by any other name, the provision is an insult to local


education authorities? Our local education authorities—be they successful or unsuccessful—are being told that they are incapable of running schools. Are local education authorities being told that the democratic accountability that they offer is no longer relevant? Moreover, are we being told by Ministers that differential funding, which various Labour Members have argued against in this debate, is now acceptable?

Mrs. May: My hon. Friend makes a very interesting point. I think that every Labour Member needs to think through the Bill's consequences for local education authorities and the Government's views on them.
I tell my hon. Friend the Member for Buckingham (Mr. Bercow) that there is an even greater illogicality in the Government's position. The Government have said—the Minister for School Standards has confirmed it in response to an intervention by my hon. Friend the Member for Guildford (Mr. St. Aubyn)—that if a group of grant-maintained schools wishes to join in an education action zone, it will be able to do so. The Government are, therefore, saying that a group of grant-maintained schools can form an education action zone—with freedom from the local education authority and, should they wish, from the national curriculum, and with powers on how to employ their staff—but that they cannot have those powers or freedom if they maintain grant-maintained status.
The Government are interested only in abolishing something called "a grant-maintained school". They are interested not in the principles underlying grant-maintained schools or in how grant-maintained schools can and have raised standards, but only in the name "grant-maintained school". It is sheer envy of that name. Ministers believe that it is perfectly acceptable for the Government to allow education action zones to have extra funding to free themselves from local education authorities because they will not be called grant-maintained schools. That is what that provision in the Bill is all about.
I suggest that the Minister and the Secretary of State should themselves think through the illogicality of saying no to grant-maintained schools, but saying yes to the very powers that grant-maintained schools provided.

Mr. Laurence Robertson: I endorse everything said in this debate by my hon. Friend the Member for Maidenhead (Mrs. May) and my right hon. Friend the Member for Charnwood (Mr. Dorrell). I should also declare an interest, as my daughter attends a grant-maintained school. She is very proud to attend such a school, and I am very proud that she attends one.
We have a number of grant-maintained schools in Tewkesbury, and I have spent much time at them.

Mr. Bercow: Will my hon. Friend take this opportunity to accept from me—having met his excellent daughter at Conservative party conferences—that she is an admirable advertisement for the continuation of grant-maintained schools?

Mr. Robertson: As they say on the television, "You may think that, but I couldn't possibly comment." Nevertheless, I thank my hon. Friend for that very kind intervention. I suspect that more unfriendly interventions will be forthcoming as I make my speech.
I have spent much time at those grant-maintained schools, and base my remarks not only on those visits, but on my experience, some years ago, as a chairman of governors of a primary school that had about 200 pupils. At that time, primary schools of that size could not opt out; they could not apply for grant-maintained status. I tended to find that, as chairman of governors, I spent at least half my time fighting the nonsense of the socialist LEA in Bolton, and very little time doing what I was supposed to do. The headmaster found himself in a similar position.
The LEA adopted a sinister and arrogant attitude to that primary school, because it knew that, at that time, we could do nothing about it. It—and other LEAs—adopted a very different attitude to secondary schools that could opt out, because of the constant threat that those schools might leave the LEA. I do not like to use the word threat, but, when dealing with socialist LEAs, especially in the north, it was necessary to use every available weapon to run a school decently.
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That experience persuaded me to put pressure on the then Secretary of State, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), to allow smaller primary schools to apply for grant-maintained status. I was proud to take part in that campaign, and the Secretary of State authorised the change. I felt that smaller primary schools needed financial and managerial autonomy. The schools that have opted out have enjoyed success as a result.
The then Government wanted schools to become grant maintained because they wanted to give parents a choice about which schools their children attended. There were grant-maintained schools, Church schools and grammar schools—a range of schools—so the opinion of parents, the people who really take these decisions, mattered.
However, I have one criticism of the then Government: they made it far too difficult for schools to opt out. An enormous turnout of parents in the ballot was required. That requirement, and the terrible campaigns that LEAs carried out against schools that appeared likely to opt out, made it difficult for schools to opt out. Before any hon. Member says that there are not that many grant-maintained schools, I should say that that is hardly surprising, because there were no depths to which the LEAs would not sink to prevent schools from opting out. That is why there are not as many as there should have been.

Mr. Brady: Would my hon. Friend care to reflect on the position of many grant-maintained schools that faced sinister and unpleasant campaigns by their LEAs, which tried to oppose GM status? Many of those schools are in great fear of the prejudice that they may experience from predominantly Labour LEAs when they are forced back into the LEA sector.

Mr. Robertson: My hon. Friend is right. Those schools do not know what will happen and they are afraid of being returned to that situation. Some disgraceful campaigns were mounted against schools that proposed to opt out.
I attended St. James's school in Farnworth, Bolton which I believe, became the second school in the country to opt out. It was interesting to watch how the LEA acted


to try to prevent the school from doing so. It let it be known that the school might close. That made parents slightly dubious about sending their children to the school, so the rolls started falling, and the LEA then considered closing the school. The Bolton LEA thereby put the school in a position where it had no option but to opt out. The campaign that the LEA waged against the school was disgraceful. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) is absolutely right.
The previous Government should have made it easier for schools to opt out, especially given the success that grant-maintained schools have had. I ask a single question. Those schools—

Mr. Don Foster: The hon. Gentleman has just suggested that the grant-maintained school experiment has been some sort of success. I appreciate that this is the last gasp of an attempt to save them, but will he enlighten the House with his knowledge of evidence that demonstrates that the grant-maintained school sector has led to overall benefits? Specifically, will he draw our attention to any research that he knows of that has shown that the grant-maintained school experiment has led to a raising of academic standards?

Mr. Robertson: I can only quote the figures that I have been given. [Laughter.] Well, I shall not quote the figures that the Minister gave me because, when I did so this morning, having had them in writing from the Minister, he denied that he had given them to me—so I shall not quote the Government's figures, because I may be corrected. They may change later this evening.
However, I understand that 92 per cent. of grant-maintained schools have appointed additional staff, 91 per cent. have increased their spending on books and equipment and 54 per cent. have increased their spending on new buildings. [Interruption.] From a sedentary position, the hon. Member for Bath (Mr. Foster) suggests that I am talking only about cash. I am actually talking about what that cash bought, which seems to me to be quite important.

Mr. Hayes: My hon. Friend is right to draw attention to those extra measurements of input, but measurements of output are also relevant. As my right hon. Friend the Member for Charnwood (Mr. Dorrell) said, measured by examination results, by university entrance or by any of the standard criteria for academic success, grant-maintained schools are way above and beyond a success; they are a towering success. I know that the hon. Member for Bath (Mr. Foster) was a friend of city technology colleges and grant-maintained schools before he entered the House.

Mr. Robertson: As usual, my hon. Friend makes the point better than I could.
If, now that opted-out schools are about to lose their status, I were to ask them, "Would you, by choice, revert to your previous status under the LEA?" I am not aware that any school would choose to do so. We should listen to what those schools are saying. It is all very well for us to talk about the subject in the Chamber. Should we not listen to what the schools are saying? They opted out

voluntarily, and they would not revert to their previous status. They have had success because they have been able to control their finances. They have more teachers, books and buildings.
Grant-maintained schools have also been a success in less tangible terms. When one walks through a grant-maintained school, one can feel its liveliness, balanced by discipline. I believe that that is unique in such schools.

Mrs. Browning: I wonder whether my hon. Friend is wondering just how wrong a Prime Minister can be. Labour Members are all gesturing from sedentary positions to suggest that everything that my hon. Friend is saying about academic standards and discipline in schools is wrong, and yet the personal preference of the Prime Minister of this land—

Mr. Tony McNulty: Cheap.

Mrs. Browning: It is not cheap; it is fact. It cannot be denied. If the Prime Minister of this land, who has the choice of any school that he wishes—including those in the private sector—decides to send his son to a GM school, is his judgment out of accord with that of the members of the Labour party, or is it that they are right and he is wrong? I wonder what my hon. Friend thinks of that.

Mr. Robertson: I am grateful for that intervention. The Prime Minister is absolutely right to exercise his choice about which school he sends his children to—I wish them the best of success—but he is wrong to deny that choice to other children. Of course, he is only following what many other Labour Ministers have done. They have attended schools that, at a later date, they have wanted to close. It is a matter of "Do as they say and not as they have done." They have benefited from a far greater education than many Conservative Members have done, but have then wanted to close those very schools. It is hypocrisy. I am sorry that that is the case.
I spoke of the success that resulted from financial and managerial autonomy. I spoke of the intangible success of a disciplined and lively atmosphere in grant-maintained schools. That has led to the academic success that Conservative Members have mentioned.

Mrs. Louise Ellman: Is the hon. Gentleman seriously saying that local authority schools do not have discipline and standards? Is he aware that only a handful of schools chose to opt out in areas such as Labour Lancashire? Is he also aware that the Labour-controlled Lancashire county council transformed its inheritance from a Conservative administration to raise standards of numeracy and literacy, as well as well-being and discipline?

Mr. Robertson: Having spent 33 years in Lancashire, I do not recognise the success that the hon. Lady describes. I am not suggesting that there is no discipline in schools that are not grant maintained. I am saying that the grant-maintained schools that I have experience of have successfully balanced a great fun atmosphere with good discipline. If the hon. Lady is suggesting that there has not been a discipline problem in our schools, she has


lived in a different country from me. There have been serious discipline problems at many schools in Lancashire.
The financial autonomy, managerial autonomy and intangible atmosphere of grant-maintained schools have led to great academic success. That success is clear for all to see. It is a tragedy that the Government want to scrap those schools.
What will happen to grant-maintained schools when they return to LEA control? Like other schools, they will have to queue up for money from LEAs. That is difficult for many schools. Many councils have a lot of bureaucracy and top-slice the money, diverting it from schools. I pointed out to the Secretary of State at Education and Employment questions a few weeks ago that the Labour group in Gloucestershire did not want to passport the Government's extra money to schools. That money is being passported only thanks to the Conservative group, with the support of the Liberal Democrat group. The Labour group voted against it.

Mr. Brady: Disgraceful.

Mr. Robertson: Absolutely disgraceful.
If something is not broken, we ought not to be fixing it. As my hon. Friend the Member for Maidenhead asked, why are the Government making the changes? It is another vain attempt to look dynamic. If there had been no grant-maintained status, the Government would probably have introduced it, just to look as though they were doing something. Their behaviour is spiteful. Many Labour Members still consider good education to be an elitist concept. I did not have the education that I might have wanted, but I respect those who did and I respect organisations that provide good education. It is a pity that the Government do not. Their socialist principles are in good health and are here for all to see.

Mr. Brady: I am delighted to follow many of my colleagues who have spoken eloquently in support of grant-maintained schools. [Interruption.] The Secretary of State is chuntering from a sedentary position, as he was when my hon. Friend the Member for Tewkesbury (Mr. Robertson) was speaking. My hearing is very good. I could tell that he was suggesting that my hon. Friend had had the good fortune to attend a grammar school, as I did. I saw the palpable disappointment on his face when he discovered that that was not the case.

Mr. Laurence Robertson: I am happy to correct the Secretary of State. I am not proud of the fact, but I had the distinction of failing the 11 plus. I went to a good secondary modern school and did not go to a grammar school until I was 16.

Mr. Brady: We may come to selective education on the second day on Report. I point to my hon. Friend as a perfect example of how a selective education system can work for the benefit of all. My hon. Friend was not traumatised and made a failure for life by failing his 11 plus. I accept that the Deputy Prime Minister may have suffered from that more significantly. We shall doubtless come to the issue on another occasion.
I am proud to defend grant-maintained schools, but I am sad that we have to do so. The Government's actions regularly contrast with their policies. They say that

intervention should be in inverse proportion to excellence. That sounds fine and we all support the principle. However, their actions oppose it. To abolish grant-maintained status when grant-maintained schools achieve so much is a disgrace, as is the Government's intention to damage grammar schools, which are another mark of excellence in our state education system. The Government should be proud of them, as we are.
The Government have moved some way towards understanding the logic of giving greater freedom and independence to schools. That is evident in the education action zones proposals, principally for failing schools in inner-city areas, which will be given greater freedom and flexibility. At the same time, as several of my hon. Friends have said, the Government's policy on grant-maintained schools runs in entirely the opposite direction.
By creating foundation schools, the Government have moved a little way. The measure is a sop to grant-maintained schools and the idea that independence and autonomy in schools are a good thing; it is very half-hearted. By going so little of the way towards a system that we have seen work so effectively, the Government risk throwing out all the benefits of grant-maintained status. Parents in many parts of the country will have cause to criticise the Government for that in years to come.
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The imposition of LEA representatives on boards of governors, the removal of articles of government of schools, the imposition of a standard new form and the control over admissions policies all point to a major erosion of independence.
Changes in funding arrangements, which have been discussed to some extent, are entirely inadequate and have not been made sufficiently explicit. We need far greater transparency and a far fairer settlement in transitional arrangements—not only over one year—particularly for schools that only recently became grant maintained, such as Altrincham girls' grammar. It is vital that such schools should be able to continue and complete their restructuring, expecting that special purpose grants will be available and without having to do so in a concertina time scale.
To change the teaching force and the profile of staff over one year would be very unsettling. It would be appropriate for the Government to consider extending the transition period to allow such schools to take a longer view and to smooth out changes as they otherwise would have done.
My right hon. Friend the Member for Charnwood (Mr. Dorrell) referred to the academic success of GM schools, which I was going to do only in passing. I am pleased that, in contrast to their performance in Committee, Labour Members did not take the trouble to try to suggest that the performance of GM schools was not as good as we claim. The hon. Member for Bath (Mr. Foster) challenged one of my hon. Friends, however, so I shall give him some of the figures that ought to be on record in this debate.
The figures are very clear; they show the percentage of schools in which pupils achieved, for instance, five-plus A to C grades at GCSE. In the grant-maintained sector,


the figure is 53.3 per cent., the national average is 42.6 per cent. and the LEA performance is 39.8 per cent. That difference is maintained even in areas where there are no selective schools. GM schools in those areas achieve a performance of 45.6 per cent. against an LEA performance of 38.4 per cent.
Before Labour Members talk about social differences across the country, I should point out that the same difference in performance is borne out even in areas where many free school meals are provided. In areas where more than 30 per cent. of school meals are provided free of charge, GM schools deliver a performance of 29.4 per cent. of pupils achieving five-plus A to C grades, against an LEA performance of 21.7 per cent. I know that the hon. Member for Bath is itching to get to his feet, so I shall allow him to intervene.

Mr. Don Foster: The hon. Gentleman was absolutely right; I was itching to get to my feet. If grant-maintained schools were the success that he described, presumably the prediction of the former Secretary of State, Mr. John Patten—that by about four years ago, the majority of secondary schools would be grant maintained—would have come true. He said that if they were not, he would eat his hat, garnished; we are still waiting for him to do so.
On statistics, does the hon. Gentleman accept that it is important that we are concerned about results across the country? He must, therefore, demonstrate that the growth of GM schools—what growth there has been—has led overall to an increase in success at GCSE level, for example. Does he acknowledge that, in LEAs where there has been a growth in the number of 15-year-old pupils who have gone to GM schools, there has not been a commensurate increase in the average GCSE point score? That is statistically correct.

Mr. Bercow: rose—

Mr. Foster: Some GM schools have done better because they have received additional funding and they should have done better. But, overall, there has not been an increase.

Mr. Brady: I am beginning to become confused about who is intervening on whom. My hon. Friend the Member for Buckingham (Mr. Bercow) sought to intervene on the hon. Member for Bath. I feel as though, by rising to my feet, I am merely giving my hon. Friend an opportunity to speak.

Mr. Bercow: My hon. Friend displays characteristic courtesy in giving way on this point. Does he agree that the hon. Member for Bath (Mr. Foster) imposes far too great a burden of responsibility on grant-maintained schools? It is surely not necessary for grant-maintained schools, which constitute a tiny minority of maintained schools, to show that they have improved standards in all other schools. In order to retain GM schools, we must simply demonstrate that they do not damage other schools.

Mr. Deputy Speaker: Order. Interventions should not be speeches: they should be very brief.

Mr. Brady: I thank my hon. Friend. I agree that it would be unfair to place such a responsibility on any one

grant-maintained school. The argument advanced by the hon. Member for Bath—like those put by Labour Members—reveals a manifest failure genuinely to grasp the importance and benefit of competition. That fact emerged earlier by way of intervention. Grant-maintained schools have played, and continue to play, a critical role by setting a gold standard to which other schools can aspire. Amidst all the rhetoric, the Minister for School Standards occasionally recognises that fact by saying that he wishes to bring all schools to the standard of grant-maintained schools.
However, the reality will be entirely the opposite. There will be a process of levelling down—removing the successful grant-maintained schools and returning to a mixture of local authority control, in one form or another, which will erode standards. My right hon. Friend the Member for Charnwood revealed that 30 of the top 100 improving schools are grant maintained. That is further compelling evidence of the key role that grant-maintained schools can play in raising education standards in this country. It is a tragedy that the Government will prevent that progression.
New clause 4 will not only greatly improve the Bill from a technical point of view, but be a vital step towards a fairer approach on the part of the Government. It is impossible to justify the new Government's decision. Parents have voted—in some instances by overwhelming majorities—for grant-maintained status, but the Government have decided to wave them aside and push legislation through the House of Commons.

Dr. George Turner: Will the hon. Gentleman give way?

Mr. Brady: Yes, with some reluctance.

Dr. Turner: Does the hon. Gentleman accept that there was a vote on the policy which was thrashed out before the general election? The electorate gave the Government the mandate to introduce the compromise that was trailed in the White Paper and which is brought forward in this Bill.

Mr. Brady: The hon. Gentleman reveals his Stalinist tendencies. Although he may have enjoyed the brief period of success thrust upon him by the election result last year, some parts of the country did not vote for the kind of policies that he supports.
In my constituency—where the electors clearly did not vote for the Labour manifesto—the figures speak for themselves. Parents wish to retain grant-maintained schools in my constituency. At my old school, Altrincham grammar school, 78 per cent. of the parents voted and 75 per cent. voted in favour of grant-maintained status. At the Ashton upon Mersey school, 73 per cent. of parents voted and 76 per cent. of them voted for grant-maintained status. At the Blessed Thomas Holford school, 64 per cent. of parents voted, but 84 per cent. of them voted in favour of grant-maintained status.
There is a very real demand for grant-maintained schools in my constituency. Such schools were, and are, popular and they are doing a good job. They were always good schools, but they have improved dramatically since they became grant maintained. The quality of grant-maintained schools shines through not only in


selective educational areas. That is an important point as Labour Members often try to attack grant-maintained schools on the false premise that they are all selective.
I will refer once again, as I did in Committee, to a school of which I am particularly proud—Ashton upon Mersey school, where 23 per cent. of the pupils have free school meals. It is by no means in an area of great social standing or privilege, but it achieves a remarkable outcome for any school. Possibly—the Minister may be able to correct me—it is the only school in the country that has twice achieved an outstanding award from the Office for Standards in Education and a charter mark, and has recently been made a sports college. It is not a selective or grammar school, but a classic and fine example of a grant-maintained school—in this instance a secondary modern, which is using the freedom to control its own resources, decide its own policy and create its own ethos to generate a proud and effective school which serves the local community well.
Ministers would be wise to reflect on the lessons that can be learnt from schools such as Ashton upon Mersey and countless other grant-maintained schools, and they would be wise to remember the popular mandate that many GM schools received from parents who voted for them in overwhelming numbers.

Mr. St. Aubyn: We have heard some excellent speeches from Opposition Members in praise of grant-maintained schools. As my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said, it is depressing that we have heard little in response from the Labour side—not even a gracious acknowledgement of how successful those schools have been. Anyone who is interested in raising academic standards has surely to begin with that acknowledgement.
I ask the Government to acknowledge another home truth; that academic excellence is for the few, not the many. Not all of us can have a first class degree. In fact, not all students should go to university and not all school leavers should try for A-levels. Different approaches and levels of education are appropriate to different individuals and if we accept the logic of that, we accept that inevitably, in a fair education system, society will invest more money in some children than in others and yet it will still be a fair system. If we accept that, we are not outraged by the idea that the resources devoted to some schools are slightly higher pro rata than those devoted to others.
The real test of the record of grant-maintained schools is not whether they have achieved a marginal increase in the resources that go into them, but how they have achieved far more than a marginal increase and improvement in the academic success of pupils.
In the area I represent, we have a number of grant-maintained schools. They are not selective, as we have a non-selective system throughout our county, yet they have consistently achieved outstanding academic results. Today, they are asking what they have done wrong. Why are they being forced into the yoke built by this Government in the Bill, which will force them to conform to the branding exercise that new Labour is carrying out?
As my hon. Friends have said, we know that the Government accept the principles of GM schools. Indeed, on 5 February I recall the Minister for School Standards

telling us how he intended to build on the experience of those schools. Welcome though that was at the time, as with much that we hear from the Minister it was an ambiguous statement. So much has been reserved in the Bill to be controlled by regulation and decree after it is enacted that it is deeply ambiguous throughout. Conservative Members may be in for a pleasant surprise, whereas some Labour Members may be in for a shock, when education action zones are extended to include clusters of GM schools that know how to take advantage of them.
Our difficulty with the Bill is that, because it will give so many discretionary powers to Ministers, it gives little away to hon. Members who are being asked to agree to it. The new clause would tie down the democratic accountability that is needed for any legislation that introduces as many new powers as this Bill does.
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As I said, there is a non-selective system in Guildford, yet the achievement of the schools there is significant. Recently, I met the heads of GM schools in the area, who asked me why they should choose foundation status and what it would achieve, as it would mark them out as former GM schools and would not provide them with their previous independence, either financially or from LEA governors.
Fortunately, there is a Conservative LEA in my area. The response of people throughout the country who are in favour of GM schools will undoubtedly be reflected in local election results—more and more local authorities will return to Conservative control as people realise that that is the only way in which they can be sure of the approach to local education that is represented by the excellence achieved by GM schools.
Because Guildford has a Conservative LEA, I can reassure the heads of GM schools in my area, but I understand their concerns for schools where there is not a Conservative LEA. They are worried that, in an area that has a Labour LEA, foundation status will be used as a mechanism to discriminate against GM schools and that a political project will be launched to try to force those schools to give up foundation status and return to the mainstream. If that project succeeded, it could be heralded as a political victory for the Government when in fact it would be a cynical exercise in undermining the morale and success of some of the best schools in the country.
Earlier, we were asked to provide evidence of the success of GM schools. Last November, The Independent published research showing that barely 5 per cent. of schools exhibited an improvement in standards for each of the previous four years. Of that 5 per cent., one in three were GM schools. Moreover, as we heard, eight of the top 20 schools in the country are grant maintained. There can be no doubt about GM schools' ability to raise standards.
Because of the Government's retrograde step, GM schools are being denied the opportunity to build partnerships. Labour Members often talk about the need for local partnerships; GM schools are ideally placed to build them. They could show other schools in the area how to build forms of co-operation that go way beyond what the LEA can offer through its bureaucratic and stratified systems and means of delivery. Why should not local schools go out to tender in a group bid for financial


and auditing services? Why should not groups of schools pool their transport or sports facilities? Very few schools adopt such an approach, but if any group of schools is capable of doing so and developing these ideas, it is GM schools. They should do it because, in doing so, they would produce a better quality service that releases resources to put into education.
It is a great regret that, as a result of the passing of the Bill, there will be no opportunity to develop the independence of GM schools in setting their capital budgets. It was a matter of resentment to the hon. Member for Waveney (Mr. Blizzard) that GM schools had some freedom on their capital budgets, but let us not forget the context in which that freedom was given. The capital spending of GM schools was outside the public sector borrowing requirement. We learnt only by chance in Committee that the Government had allowed that favourable status to be lost. It appears that they are incapable of doing anything to resurrect it. They appear to be happy to see £l1 million of capital spending by GM schools come back within the PSBR and to deny such schools the opportunity, under whatever status they might be granted, to regain that freedom on their capital budgets.
The Minister told us in Committee that his Department had examined the problem and was unable to come up with any answers, but surely the fact was that it was unable to come up with any answer that would meet the Government's objective of getting rid of GM schools.

Mr. Byers: I am reluctant to intervene because the House wants to make progress, but the hon. Gentleman has been misleading in his description of what I said in the Standing Committee. For the record, he should accurately reflect the fact that the decision was taken by the Office for National Statistics. I made it clear that the Government were making representations for it to change its decision. I hope that the hon. Gentleman agrees that that is an accurate reflection of what was said in Committee, unlike what he has just said.

Mr. St. Aubyn: I believe that there is a misunderstanding. I was trying to explain to the Minister that he would have immense difficulty changing the ruling of the National Audit Office precisely because he had constrained his freedom of manoeuvre by the way in which he has designed the Bill.

Mr. Byers: The hon. Gentleman needs to be aware that the National Audit Office has nothing to do with the matter, which involves the Office for National Statistics. He needs to be aware that the ruling affects grant-maintained schools as it applies to their present status, regardless of the new framework in the Bill.

Mr. St. Aubyn: I stand corrected, but I must point out to the Minister that he has an opportunity in the Bill to create a structure for GM schools that would still be recognised as providing them with a capital budget outside the PSBR. He has failed to take that opportunity.

Mr. Blunkett: I need to put it on record that the House does not have the facility to overturn the Office for National Statistics. It is important for the

hon. Gentleman's sake and the sake of his Front-Bench colleagues, who know that what I have said is correct, to state that we are not in a position to do that.

Mr. St. Aubyn: I am grateful to correct the impression created by the Secretary of State. We are talking not about overruling the Office for National Statistics but about creating a new structure into which GM schools could be fitted that would satisfy the requirements of that office and enable the favourable capital budget treatment to continue—but that would involve maintaining the independence and integrity of GM schools, which is anathema to the Government. As a result, the capital spending of schools in general and former GM schools in particular will be constrained in a way that is due purely to dogma and the Labour party's blatant approach to GM schools.
The Bill is all about conformity. As my hon. Friend the Member for Maidenhead (Mrs. May) said, there is a contradiction between the Government's desire to attack individual grant-maintained schools and the possibility that, through the education action zone, they may be prepared to sanction a cluster of GM schools. The reason for the contradiction is that the Government seek conformity. Through conformity, they may achieve some improvement in the performance of the laggards—the schools that are performing least well—but they may at the same time undermine the spirit, energy and enterprise of the best schools and thus the service that our education system should provide for the best of our children.

Mr. Hayes: New clause 4 addresses the contradiction that lies at the heart of the Bill. The Government are sending out a confused message about their appreciation of the role of the local education authority, individual schools and the Secretary of State.
I do not argue with those who say that LEAs should take a strong, perhaps even a dominant, role. That is a logical and acceptable position. I do not argue with those who take the view that all schools should be encouraged to opt out, that LEAs should wither away and that schools should work independently. I do not even argue with those who say that the entire system should be governed centrally—that there should be an all-powerful Department for Education and Employment, that LEAs should cease to exist in all but name and that powers should be removed from the schools. All those positions are at least coherent.
The problem with the Government's approach is that it is a mix of all those positions. The Bill gives the Secretary of State more powers than any Secretary of State has enjoyed before. Labour Members who complained about the centralising tendencies of Conservative Governments over the past 20 years would do well to consider the new powers that the Bill gives the Secretary of State in a range of areas that would have scarce been thought of by Conservative Secretaries of State. Had such powers been proposed before the general election, they would have been roundly condemned by Labour Members.
The Secretary of State is a winner out of all this. LEAs take back some extra responsibilities, but their role is confused. We have already heard of the confusion about education action zones and their relationship with LEAs, and there are other contradictions in respect of the role of LEAs. The schools are, by and large, losers—and none more so than grant-maintained schools.
I shall deal with grant-maintained schools in the context of that general confusion about the future management of education. There has already been some talk in the debate about academic success, which I shall not repeat. I shall not take hon. Members on a travelogue around Windsor, Guildford, Altrincham and other fine places. I mean no disrespect, but I shall not focus on interesting schools in bizarre parts of the country, or bizarre schools in interesting parts of the country.
Given that we all accept that grant-maintained schools have achieved excellence in academic performance, I want to try to analyse the reasons for that success. Even the hon. Member for Bath (Mr. Foster) has acknowledged that in GCSE results, university entrance and A-level results, grant-maintained schools have performed disproportionately well. The question is why.
The answer can be summed up simply. It is about liberty, which breeds confidence; confidence, which breeds higher expectations; and higher expectations, which breed success. If there is one thing that my experience in education has taught me, it is that higher expectations are the key to improving educational performance. That are precisely what liberation from the LEA delivered.
I have no prejudice about that; I say it on the basis of my conversations with heads and teachers from grant-maintained schools all over the country. All of them—including those who would not vote Conservative—conclude that liberty has bred a spirit of energy and enterprise, as my hon. Friend the Member for Guildford (Mr. St. Aubyn) said. That intangible matter of ethos has changed the expectations of schools, staff, parents and pupils, and raised standards. The new spirit, energy and liberty is at risk from the Government's policy, and that is a cause of great regret and sadness.
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I said that I would not give the House a travelogue, but I want to say something about a particular school in my constituency—I would be condemned roundly if I did not. The grant-maintained Sir John Gleed girls' school is in Spalding in Lincolnshire which, I am pleased to say, retains a selective system of education. I am a grammar school boy; I make no bones about the fact that I believe strongly in selection.
Sir John Gleed girls' school is a secondary modern in a town with a good grammar school for girls that is taking a significant and growing proportion of the brighter girls in Spalding, yet it is achieving results equal to or better than many of the comprehensive schools in other parts of Lincolnshire. I was lucky enough to distribute the prizes at the Gleed last year and I can tell you that its success is largely about expectation, ethos, energy and enterprise. It is largely about what is expected of the girls who go to the school—a school which, bear in mind, has many children with learning difficulties. It is a secondary modern that takes a mixed catchment. I can tell you—

Mr. Deputy Speaker (Mr. Michael Lord): Order. I think the hon. Gentleman means that he can tell the House.

Mr. Hayes: I can tell you, Mr. Deputy Speaker—and through you, the House—that the school is a testament to the fact that grant-maintained schools that are

non-selective, that deal with difficult catchments and that have no great advantages, can achieve outstanding results. The school has improved consistently over five years, with none of the apparent advantages mentioned by the hon. Members for North-West Norfolk (Dr. Turner) and for Waveney (Mr. Blizzard).
The school is joined to another secondary modern—not just on the same site, but in the same building—which is not grant maintained; Sir John Gleed boys' school. It is an excellent school, but it is not as yet achieving the results that the girls' school is achieving. This is not about new buildings, greater capital investment or some disproportionate funding mechanism that gives undue and unreasonable advantage to the school; it is about spirit, enterprise, energy and liberty—it is about being grant maintained.
There will be those—imperialists always say this—who say that the schools would have been better off under LEA control. There will be those who make light of the intangible concepts I have described. Having visited grant-maintained schools not just in my constituency, but all over Britain, I have scarcely found one that would willingly give up that status. I have scarcely found a head teacher who would honestly say he regretted going grant maintained—even those who initially had reservations, who were not natural supporters and who were not Conservatives but socialists or Liberals. That is why they are so concerned and bitter about the proposals.
With a degree of empiricism, I can genuinely say that grant-maintained status has been a success. Given that empiricism, it is hard to imagine why a fair-minded and objective Government would want to snuff out that success—but that is precisely the prospect we have before us tonight. It is not, I am happy to say, a proposal with which I wish to be associated.
Given the initial failure of this confused and mixed-up Bill, I look forward to the Government clarifying their position on the future of education as they perceive it; clarifying how they see the role of LEAs and how they will develop; clarifying how they see the freedom of individual schools developing and, of course, clarifying what direction needs to emanate from the Government.
The Bill does none of those things. It is a poor start. Ultimately, because we all want a good education for our children, in a spirit of generosity I hope that the Government will do considerably better in the future.

Mr. Bercow: A number of my hon. Friends spoke eloquently of the success of grant-maintained schools. In each case, they cited schools in their constituencies that have performed, and continue to perform, exceptionally well. To date, none of the evidence that my hon. Friends adduced in support of the proposition has been disputed by any hon. Member.
It should be placed on the record that the hon. Member for Bath (Mr. Foster), whose long-standing hostility to grant-maintained schools is well understood, seeks to obscure the realities by posing a challenge to grant-maintained schools that it is wholly unreasonable for the House to expect them to fulfil. The point bears examination. He asked in all sincerity whether successful grant-maintained schools had contributed to the greater success of all schools. The implication was that, unless they could demonstrate that they had, their raison d'etre would disappear.
I disagree. It is clear that these schools have succeeded by themselves. I have four in my constituency that are dramatic beacons of excellence. They are thriving at all levels, including key stage 2, GCSE and A-level, in providing facilities, in satisfying their requirements in sport, in achieving excellence in pastoral care, and so on. Each and every one of them is a success.
If the hon. Member for Bath challenges me to prove that those schools have also raised the standards of all other maintained schools in Buckinghamshire, I will readily concede that I cannot—of course I cannot—but equally, and more important, he cannot prove that successful grant-maintained schools in Buckinghamshire have in any way damaged the educational attainments of other schools. That is the point. The onus of proof is not on a grant-maintained school to demonstrate that, as well as educating successfully its own pupils, it has managed somehow to achieve the extraordinary feat of educating successfully pupils of other schools. At most, all that is necessary is for it to be able to demonstrate that it has not undermined the quality of education provided in other institutions, and on that I very much doubt whether the hon. Gentleman will be able to provide evidence.
It is uncharitable of the hon. Gentleman in a sense to smear grant-maintained schools by requiring of them achievements that he would not require of ordinary maintained schools. The record of grant-maintained schools compares favourably with that of other schools. I would be no more likely to assert that all state schools should be grant maintained than any other Opposition Member. I have never argued that case. Many such schools do not wish to be. However, many have chosen to be grant maintained and, having escaped—I use that word advisedly—local education authority control, scarcely any of those of which I am aware now wish to go back into that control.
I am a fair-minded fellow, charitable even—[HON. MEMBERS: "Hear, hear."]—as my hon. Friends' ready enthusiasm in greeting my observations testifies. I am not making a party political observation. I could point to all the examples of Labour local education authorities that have been so incompetent, malign and manifestly unsuitable that schools have rushed to escape their clutches—but I will not.
I point instead to the schools in my constituency and elsewhere in the county of Buckinghamshire that have opted to become self-governing outwith the control of Buckinghamshire county council. I am happy to describe and to criticise again and again the outrageous antics and consecutive failures year after year of left-wing education authorities, and I point to their passion for political correctness.
I make no such charges against Buckinghamshire county council. It is an estimable local education authority, so schools in my patch are not trying to escape the council's control because it is extremist or politically correct, is opposed to standards or has a track record of failure. None of those charges would be true. Indeed, the opposite is true in every case.
The county as a whole is dramatically successful, and many of its thriving schools are within LEA control. Those that have opted to become free of that control—to go their own way, make their own decisions, allocate their

own funds, organise their own priorities and determine their own successes—have, without exception, upon my visiting them or via correspondence, told me that they welcome that state of affairs and wish it to continue.
That leads me to my second and final point.

Mr. Brady: I am grateful to my hon. Friend for giving way to me, especially before he moves on to his second point—for which I can scarcely contain my anticipation. He has made an eloquent case for the excellence of grant-maintained status, in that, even in such a good local authority area as Buckinghamshire, schools still see its value. Grant-maintained status is not a negative thing, adopted merely to escape from bad local education authorities.
I have an even better example of the quality and merit of grant-maintained status. Two independent schools in my constituency have opted for grant-maintained status, because they believe that they will continue to enjoy the freedom that they had as independent schools, while being able to give the same quality of education to people regardless of ability to pay. Is it not a disgrace that the Government seek to destroy that state of affairs?

Mr. Bercow: My hon. Friend makes a powerful point. Perversely, the Government could end up by expanding the fee-paying sector as a result of their dogmatic hostility to the self-governing sector of the British education system. They would not want to do that, and they did not anticipate or plan for it, but that could be the outcome.
It comes down to a question of democracy, and whether people have a right to have their schools run by people whom they do elect and can remove, or whether they should suffer the fate, of which the right hon. Member for Chesterfield (Mr. Benn) regularly reminds us, of affairs being run by people whom they do not elect and cannot remove.
Let there be ballots; let people have a say; let the cross be placed on the paper to determine the outcome. If that can happen for grammar schools, I ask the Secretary of State why it cannot happen for grant-maintained schools.
I have said before, and I say again, that Conservatives can be forgiven for thinking that, just conceivably, the reason why the Government do not want ballots—

Ms Rachel Squire: Get on with it.

Mr. Bercow: No, I am afraid that I shall have to extend the hon. Lady's pain, because the embarrassment that the point causes the Government needs to be emphasised.
The reason why the Government do not want ballots is that they know that, in almost every instance, they—[Interruption.] The hon. Member for Dunfermline, West (Ms Squire) has clearly had her day and it is obvious that she is suffering from an illness from which I hope she will in due course recover. The Government will lose and we will win. Let democracy speak. Allow the parents to vote.

Mr. Don Foster: It is a charitable person who seeks to find some good in even the most misguided of people. I enjoyed the contribution of the hon. Member for South


Holland and The Deepings (Mr. Hayes), but I disagreed with it fundamentally. However, I agreed with one point, and that was his reference to the need for us to have high expectations of the children in our schools and of the schools themselves. He was right to draw our attention to that. I suspect that, in the past, some LEAs have not had high enough expectations of their schools, and that some teachers have not had high enough expectations of their pupils.
I even find some good—very little, but some—in the contribution of the hon. Member for Buckingham (Mr. Bercow). The hon. Gentleman at least made the point that there are some good grant-maintained schools, and I agree. There are many good grant-maintained schools. My constituency has two excellent grant-maintained schools—Beechen Cliff school and Oldfield school. They are both excellent schools with excellent staff doing a good job for the pupils whom they serve.
To say that there are good grant-maintained schools does not mean that grant-maintained status itself is a good thing. The one other thing which I share with the hon. Members for South Holland and The Deepings and for Buckingham is a disagreement with the Government's plans, but my disagreement comes from a completely different direction. Both hon. Gentlemen and the official Opposition oppose what the Government are doing because they want grant-maintained schools to continue. My party and I are clear in that we have no desire whatever to see that continuation. Our disappointment with the Government is that, instead of doing as we would wish them to do, which is to bring grant maintained schools back into the light strategic planning framework of LEAs, they are continuing to give those schools a sop by allowing them to stand outside the LEA framework. We believe that that is wrong.
At least the Government have recognised the need to get rid of grant-maintained status, and we are delighted that they have done that. As I said earlier in an intervention, grant-maintained status has not been popular. It was born out of Mrs. Thatcher's handbag back in 1988. We were told that it would be extremely popular and that, before long, the vast majority of schools would be grant maintained. That did not prove to be the case, despite the numerous bribes that were given to schools to become grant maintained. Year after year, the Tory Government came up with another new attempt to persuade schools to become grant-maintained, even requiring every governing body to consider annually whether to become grant maintained.
The one bribe that grant-maintained schools were given was the additional sums of money. When official Opposition Members tell us about some of the successes of some grant-maintained schools, the House should never forget that that is hardly surprising, as schools were given significantly increased sums to enable them to carry out the various things that led to some of those successes.

Mr. Brady: Given the hon. Gentleman's conviction that grant-maintained schools are so desperately unpopular, presumably he would have no qualms in agreeing with our new clause, which would allow parents to get rid of grant-maintained schools by voting to get rid of them.

Mr. Foster: The interesting thing about the hon. Gentleman's intervention is that it was the Conservative

Government who, year after year, refused to allow the two-way option for grant-maintained schools. They were allowed to opt into grant-maintained status, but the Government refused to give them the power to vote to opt back out. It was the Conservative Government who wanted a simple one-way street and, once in, a school was stuck in it. Grant-maintained schools have had significant amounts of additional money; there is no doubt about that.
I have been challenged about the education results of GM schools. Anyone who has responsibility for education provision must look at the impact of any change in the system on the overall educational setting across the whole country. I would argue strenuously that the introduction of GM schools did huge damage to the education system. It set school against school, parent against parent and governor against governor. That led to great tension and problems in the system.
Giving additional money to GM schools has been to the detriment of all other schools. That additional money was taken from other schools.

Mr. Hayes: Will the hon. Gentleman give way?

Mr. Foster: No, I will not as time is short and other hon. Members—

Mr. Dorrell: rose—

Mr. Foster: Of course, I will give way to the right hon. Gentleman.

Mr. Dorrell: In Committee, the hon. Gentleman voted for a clause that would require the Government to secure the consent of parents before abolishing grammar school status. The hon. Gentleman approves of that principle. Will he explain why he does not support the same principle for grant-maintained schools?

Mr. Foster: If the right hon. Gentleman checks the record, he will see that I made it clear that I did not believe that such decisions should be taken on a parental ballot. They should be taken by the local education authority. The right hon. Gentleman is well aware that the one major difference between GM schools and grammar schools is that GM schools are outside LEA provision.

Mr. Dorrell: I have Hansard in front of me. The hon. Gentleman voted for clause 95 to stand part of the Bill.

Mr. Foster: I explained that afterwards.

Mr. Dorrell: It is not a question of what the hon. Gentleman said afterwards. Even the Liberal Democrats must occasionally defend the votes they cast and explain why one case is different from the other.

Mr. Foster: I ask the right hon. Gentleman to continue to read Hansard—

Dr. Julian Lewis: The hon. Gentleman is squirming.

Mr. Foster: No, I am not squirming. Immediately after the vote, I realised that I had made an error in my voting.

Mr. Dorrell: rose—

Mr. Foster: The right hon. Gentleman and I can continue this debate outside the Chamber. [HON. MEMBERS: "Give way."] No—others wish to speak.

Mr. Dorrell: The hon. Gentleman remembers a time when he mistakenly cast his vote the wrong way, but it


was not in the vote on clause 95 stand part, dealing with the principle of the grammar school ballot. If the hon. Gentleman did vote the wrong way on that, he did not tell the Committee so at the time.

Mr. Foster: If the right hon. Gentleman looks through the record, which he needs to do, as he was not with us during the discussion on that particular issue—

Mr. Dorrell: I spoke on the clause and voted on it.

Mr. Foster: I want to make progress and the House wants to hear from the Secretary of State on this issue.
The key issue that has been raised tonight is whether grant-maintained schools have led to an increase in educational standards across the country. Research evidence shows conclusively that the introduction of GM schools has not led to an overall increase in examination results. Therefore, as an experiment it has failed. However—and I acknowledge this—because of the additional resources given, some GM schools have been able to raise standards, but that has been to the detriment of other schools in the LEA area. The net result has been no increase in standards; it has been a failed experiment.
I hope that the House will recognise that GM schools represent a failed policy of the Conservative Government. The sooner that we get rid of them, the better. I very much hope that the House will reject the Conservative new clause.

Mr. Blunkett: I thank my hon. Friends for their forbearance this evening. It is a great pity that so much hot air has been expended on so much self-preening. It is a wonder that all the feathers have not fallen out. I say that because Monty Python has reconvened for a final fling, and I was reminded of the famous sketch about the dead parrot. This debate is a dead parrot. It is nailed to the perch. The Norwegian blue is gone for ever, and we have had one or two Norwegian blues tonight. I have never heard such nonsense in all my life.

Mrs. Browning: Oh, come on. You must have.

Mr. Blunkett: I will let the hon. Lady into a secret: she is probably right. I have probably heard worse once or twice in my life, but we have come fairly close this evening.
Opposition Members know perfectly well that what they are saying is not true, but I welcome the fact that they have acknowledged and specifically embraced the process of balloting for the removal of selection in grammar schools, and recommended its extension into other areas. That gets us off to a sensible start in operating democracy.

Mr. Brady: Some of us might be prepared to accept ballots on the future of grammar schools if those ballots were fair and gave choice to local parents. The Government's proposals fail on that count. If the balloting procedure was fair, the Secretary of State might have an argument.

Mr. Blunkett: Of course we will have fair ballots. That is a necessary prerequisite, to legitimise the parents' decision.
As the hon. Member for Bath (Mr. Foster) pointed out, it is a cheek for Conservative Members, who resisted time and again giving parents the opportunity to decide whether they wanted a school to come back into the family of schools, to suggest that they are in favour of parents being able to vote on grant-maintained status. That really is the cheek of the devil.
The problem for Conservative Members is simple. They want to suggest that a school's status determines its standards, and that it is the change in status that has changed or enhanced standards in certain schools, when they know perfectly well that it is not. It may be something to do with resources. We have heard a lot about that tonight.
The extra resources have been praised as a very good thing. I am in favour of extra resources for all our schools. That is why we are giving an extra £1 billion for capital spending in schools. That is not only for certain schools. The hon. Member for Altrincham and Sale, West (Mr. Brady) argued that the girls grammar school in his area needed extra funding for restructuring. He said that it would be wrong to take away the extra funding.

Mr. Brady: Will the Secretary of State give way?

Mr. Don Foster: Will the Secretary of State give way?

Mr. Blunkett: I shall give way first to the hon. Member for Bath and then to the hon. Member for Altrincham and Sale, West.

Mr. Foster: The Secretary of State rightly points out that the official Opposition are wrong in many ways. Does he agree that they are wrong in the totally scurrilous attack on me by the right hon. Member for Charnwood (Mr. Dorrell)? The record of our deliberations in Committee shows that I voted in favour of clause 95, which designated grammar schools, and against the balloting proposals.

Mr. Blunkett: I am totally in favour of fair balloting and of fair reporting of those ballots.

Mr. Brady: I want to correct a false impression that the Secretary of State appears to have. I was referring not to the capital costs of Altrincham girls grammar school—we are still fighting a battle to get capital funding for necessary repairs, and I would welcome his help with that—but to the process of restructuring the school staff, which was embarked on in good faith when the school became grant maintained last year. It was in the anticipation that that could be done over three years. Now the Government are prepared to guarantee funds for only one year, which could cause real problems.

Mr. Blunkett: I am fully in favour of extra revenue for schools. That is why we are allocating £835 million on top of what the Conservatives would have allocated—£110 per pupil, which happens to be the amount that the previous Government cut in 1996–97 per secondary school. They cut £40 per primary school.
9.45 pm
What the previous Government did was to cut the generality of funding for all schools and reallocate it to


some schools, and then claim credit for the ability of those schools to use the money—wisely, I accept—to enhance children's education. That is fine, but let us do the same for every school.
The hon. Member for Tewkesbury (Mr. Robertson), in an interesting intervention, said that he wanted to celebrate the fact that grant-maintained schools had more books. I tell you what I want to do, Mr. Deputy Speaker: I want to celebrate the fact that, following our allocation of £23 million, every school in England now has more books. We are talking about £1,000 per school. Let us do for all our schools what Conservative Members want to do for only some schools.

Mr. Laurence Robertson: Will the Secretary of State give way?

Mr. Blunkett: I will not give way for the moment. I want to make some progress. I have sat here long enough listening to the waffle of Conservative Members; it is time to deal with some of that waffle head on.
I celebrate the work that many grant-maintained schools have done. I celebrate the improvement that they have brought about for children. I have no intention of damaging their ability to deliver high standards; I want to spread the practice further. It is ridiculous to suggest that, because four of the 18 failing schools that were named in the summer were GM schools, GM schools are a failure. It is as ridiculous to suggest that as it is to suggest that the fact that 80 schools did extraordinarily well proves that the status of a school, rather than its staff, management and direction, brings about such improvements.
Conservative Members know that that is true. They know that that is what is happening in schools. They need only take the word of the chief inspector. Such improvements are self-generated: they are a result of the direction taken by a school, of the quality of teachers, of the leadership given by the head and of high expectations. Of course dynamism is an element, but it is the dynamism within a school, not the status of that school, that makes the difference.
That is why we are driving forward the standards agenda. It is why we established the standards unit. It is why there will be a literacy and then a numeracy programme for all primary schools. It is the reason for the extra resources—the substantial investment in greater specialism. It is why education action zones will transform people's chances.

Mr. Hayes: Will the Secretary of State give way?

Mr. Blunkett: I shall in a moment.
Do hon. Members want to hear what those in charge of grant-maintained schools really think? I respect the representatives of those schools, who have consistently and constructively helped to ensure that the transfer is smooth, rational and sensible. A letter sent yesterday by the grant-maintained joint monitoring group states:
On the eve of the Report Stage of the School Standards and Framework Bill, we would like to take this opportunity to put on record our support for the constructive approach that the Government has adopted towards the Bill during its Committee Stage.

The group was particularly impressed by the Government's determination to resist any attempt to undermine the status of foundation category. It said:
We also support Ministerial statements that 'schools control schools' and that financial delegation should reflect the current GM model.
The group said that because we have repeatedly made it clear that schools control schools. We have made it clear that the fact that schools will no longer be unfairly funded, that they will be part of a collaborative, co-operative admissions policy and that there will be wider accountability does not detract from their ability to deliver high standards.
Right across the board in the United Kingdom, people are acknowledging what happened and what can happen. Let us consider Steven Norris, who was a Minister in the previous regime. On the radio this morning, he said:
I personally believe that our failure in 20 years to significantly improve the level of public education is one of the areas that I believe that we as Conservatives have got to be most concerned about and, frankly, to some degree ashamed of.
The whole country is ashamed of what the previous Government did, and the whole country is behind us in ensuring that we unite the education service on standards, not structure, and on children, not segregation; and in ensuring that all of us can be proud of our education system, wherever we live and wherever those children go.

Mrs. Browning: As the hon. Member for Bath (Mr. Foster) said earlier in the debate, new clause 4 was perhaps a last attempt—certainly in the House—to preserve the status quo for grant-maintained schools. We have heard today the anomalies in the Government's thinking on giving parents choice and on listening to what governing bodies and teachers want. Although Ministers support a ballot on the retention of existing grammar schools, they want to deprive existing GM schools of the same principle. Perhaps that is at the core of their thinking. There is little principle in their thinking, but much dogma.
In its manifesto, the Labour party said:
GM schools will prosper under new Labour.
The Secretary of State has also just read a letter of endorsement. However, it is plain to every hon. Member who visits grant-maintained schools—I visited one this week, and I shall visit another tomorrow—that GM schools are so frightened that, at the stroke of a pen, they will lose their GM status, that they cling to the idea of being offered foundation status. Although we all understand why they cling to that idea, the offer is a form of intimidation that will come back to haunt the Labour party after standards decline because of the demise of GM schools, and after connivance at a ballot automatically results in the end of grammar schools, once legislation is in place.
No principle was attached to the Government's statements in this debate. The Labour party and the Secretary of State simply have a long-held belief that, although excellence in schools is appropriate to include in their glossy brochures, the excellent results produced by GM schools should be discounted. For the Government, excellence is not measured in results but is based on their prejudices. They believe that GM schools—and the ethos of those schools and the excellent results that they achieve—should be abolished.
As Opposition Members have said in the debate, it is extraordinary that the very qualities possessed by GM schools—the freedom and flexibility that have produced their excellent results—which the Government will take away from them, are the qualities that Ministers believe will ensure the success of education action zones.
In its manifesto, the Labour party clearly stated that education action zones will
attack low standards by recruiting the best teachers and head teachers to under-achieving schools, by supporting voluntary mentoring schemes to provide one to one support for disadvantaged pupils; and by creating new opportunities for children, after the age of 14.
We know that if schools are part of an education action zone, they can openly search on the market for teachers and head teachers; they can disallow the existing conditions of pay and employment for existing staff; they can adopt their own curriculum; and they can attract money from the private sector. They can do all the things that GM schools can currently do, yet, for some pernicious reason, the Government want to deprive GM schools—

Ms Squire: indicated dissent.

Mrs. Browning: The hon. Lady shakes her head, but that is what education action zones will do. She knows that; she was present in Committee. Extraordinarily, although those methods, systems, freedoms and flexibilities have a proven track record, and although the Government believe that they have been seen to work, they have taken them away from one group of schools—and now, suddenly, they are to introduce them into another group of schools. There is no logic or principle underlying that decision.
The Secretary of State listed all the extra money that the Government were pouring into education—money for this, money for that. In the county of Devon, where I must this weekend respond to more than 30 pieces of correspondence received this week from schools and parish councils, people are not facing all the wonders of new Labour, of modern Britain, of super-school Britain or whatever other slogan the Secretary of State cares to choose; they are facing cuts. This year, council tax bills in Devon are to increase by 19.4 per cent., yet throughout the county there are to be cuts in the classroom.
The Secretary of State must learn that all the sloganising and glossy brochures in the world mean nothing. I advise him and his colleagues, instead of spending their time in Millbank tower, to get out into the country—as we are doing—to visit schools, and to talk to the head teachers who, this financial year, are confronted with real-terms cuts in the classroom. Those cuts will be felt especially in GM schools when the Bill receives Royal Assent.
The Secretary of State is in good company because, like him, the Liberal Democrats have a long track record of wanting to abolish grant-maintained schools. Indeed, the Liberal Democrat chairman of education in Devon had a letter published in The Times Educational Supplement, saying that GM schools would lose teachers. However, teachers will become redundant as a result of the Bill.
I remind Labour Members and Liberal Democrat Members who said that few schools took up the option of GM status after a certain date, why that was. What happened when Labour or the Liberal Democrats, or a coalition of both, took control of an LEA? Whenever any governing body or any group of parents wanted to engage in a democratic ballot on GM status, they faced the might and opposition of a propaganda campaign by Labour and the Liberal Democrats. "Focus" newsletters were popped through every parent's door, saying why their child's school should not become grant maintained.
When the Labour party was in opposition—[Interruption.] I shall not mention the hon. Member for Plymouth, Devonport (Mr. Jamieson); he need have no fear of that. The Labour party, in opposition, was supported in its campaign by the trade unions—especially the National Union of Teachers—which ensured that they obtained the name and address of every parent in a school when a ballot was in prospect. They published propaganda and made jolly sure that people were intimidated, and that a democratic ballot did not take place. We know, therefore, what the Labour Government really think about parents' free choice.
Extraordinarily, since the general election, the Secretary of State has granted GM status to some schools. What a cynical exercise, when he well knew that he was about to oversee their demise by means of the Bill. I hope that, in government, the Labour party will learn before too long that democracy through the ballot box, which Labour Members constantly talk about, extends further than the ballot box on 1 May 1997. Parents will speak. Parents will want to vote. If Labour Members deny them the opportunity to exercise their preference for grant-maintained schools, the fact will come back to haunt them in another ballot.

Question put, That the clause be read a Second time:—

The House divided: Ayes 129, Noes 327.

Division No. 201]
[9.59 pm


AYES


Ainsworth, Peter (E Surrey)
Collins, Tim


Amess, David
Curry, Rt Hon David


Ancram, Rt Hon Michael
Davies, Quentin (Grantham)


Arbuthnot, James
Davis, Rt Hon David (Haltemprice)


Atkinson, David (Bour'mth E)
Day, Stephen


Atkinson, Peter (Hexham)
Dorrell, Rt Hon Stephen


Baldry, Tony
Duncan, Alan


Beggs, Roy
Duncan Smith, Iain


Bercow, John
Evans, Nigel


Beresford, Sir Paul
Faber, David


Boswell, Tim
Fallon, Michael


Brady, Graham
Flight, Howard


Brazier, Julian
Forth, Rt Hon Eric


Brooke, Rt Hon Peter
Fox, Dr Liam


Browning, Mrs Angela
Garnier, Edward


Bruce, Ian (S Dorset)
Gibb, Nick


Burns, Simon
Gill, Christopher


Butterfill, John
Gillan, Mrs Cheryl


Cash, William
Goodlad, Rt Hon Sir Alastair


Chapman, Sir Sydney (Chipping Barnet)
Gorman, Mrs Teresa



Gray, James


Chope, Christopher
Greenway, John


Clappison, James
Grieve, Dominic


Clark, Rt Hon Alan (Kensington)
Gummer, Rt Hon John


Clark, Dr Michael (Rayleigh)
Hammond, Philip


Clarke, Rt Hon Kenneth (Rushcliffe)
Hawkins, Nick



Hayes, John


Clifton-Brown, Geoffrey
Heald, Oliver






Heseltine, Rt Hon Michael
Rowe, Andrew (Faversham)


Hogg, Rt Hon Douglas
Ruffley, David


Horam, John
St Aubyn, Nick


Howarth, Gerald (Aldershot)
Sayeed, Jonathan


Hunter, Andrew
Shephard, Rt Hon Mrs Gillian


Jack, Rt Hon Michael
Shepherd, Richard


Jackson, Robert (Wantage)
Simpson, Keith (Mid-Norfolk)


Jenkin, Bernard
Soames, Nicholas


Key, Robert
Spicer, Sir Michael


Kirkbride, Miss Julie
Spring, Richard


Laing, Mrs Eleanor
Steen, Anthony


Lait, Mrs Jacqui
Streeter, Gary


Lansley, Andrew
Swayne, Desmond


Leigh, Edward
Syms, Robert


Letwin, Oliver
Tapsell, Sir Peter


Lewis, Dr Julian (New Forest E)
Taylor, Ian (Esher & Walton)


Lidington, David
Taylor, John M (Solihull)


Lilley, Rt Hon Peter
Taylor, Sir Teddy


Lloyd, Rt Hon Sir Peter (Fareham)
Townend, John


Luff, Peter
Trend, Michael


Lyell, Rt Hon Sir Nicholas
Tyrie, Andrew


MacKay, Andrew
Viggers, Peter


Maclean, Rt Hon David
Walter, Robert


McLoughlin, Patrick
Wardle, Charles


Malins, Humfrey
Waterson, Nigel


Mawhinney, Rt Hon Sir Brian
Wells, Bowen


May, Mrs Theresa
Whitney, Sir Raymond


Moss, Malcolm
Whittingdale, John


Nicholls, Patrick
Widdecombe, Rt Hon Miss Ann


Norman, Archie
Wilkinson, John


Ottaway, Richard
Willetts, David


Page, Richard
Winterton, Mrs Ann (Congleton)


Paice, James
Winterton, Nicholas (Macclesfield)


Pickles, Eric
Woodward, Shaun


Prior, David
Yeo, Tim


Randall, John
Young, Rt Hon Sir George


Robathan, Andrew



Robertson, Laurence (Tewk'b'ry)
Tellers for the Ayes:


Roe, Mrs Marion (Broxbourne)
Sir David Madel and



Mr. James Cran.


NOES


Ainger, Nick
Brinton, Mrs Helen


Ainsworth, Robert (Cov'try NE)
Brown, Rt Hon Nick (Newcastle E)


Allan, Richard
Brown, Russell (Dumfries)


Anderson, Janet (Rossendale)
Browne, Desmond


Armstrong, Ms Hilary
Bruce, Malcolm (Gordon)


Ashdown, Rt Hon Paddy
Burden, Richard


Ashton, Joe
Burgon, Colin


Atherton, Ms Candy
Burnett, John


Atkins, Charlotte
Burstow, Paul


Austin, John
Butler, Mrs Christine


Baker, Norman
Byers, Stephen


Ballard, Mrs Jackie
Campbell, Alan (Tynemouth)


Barnes, Harry
Campbell, Mrs Anne (C'bridge)


Battle, John
Campbell, Menzies (NE Fife)


Beard, Nigel
Canavan, Dennis


Bell, Martin (Tatton)
Caplin, Ivor


Bell, Stuart (Middlesbrough)
Casale, Roger


Benn, Rt Hon Tony
Caton, Martin


Bennett, Andrew F
Cawsey, Ian


Benton, Joe
Chaytor, David


Bermingham, Gerald
Church, Ms Judith


Berry, Roger
Clapham, Michael


Best, Harold
Clark, Rt Hon Dr David (S Shields)


Blackman, Liz
Clark, Dr Lynda (Edinburgh Pentlands)


Blears, Ms Hazel



Blizzard, Bob
Clark, Paul (Gillingham)


Blunkett, Rt Hon David
Clarke, Eric (Midlothian)


Boateng, Paul
Clarke, Tony (Northampton S)


Borrow, David
Clelland, David


Bradley, Keith (Withington)
Clwyd, Ann


Bradshaw, Ben
Coaker, Vernon


Brake, Tom
Coffey, Ms Ann


Brand, Dr Peter
Cohen, Harry


Breed, Colin
Colman, Tony





Cook, Frank (Stockton N)
Howarth, George (Knowsley N)


Corbett, Robin
Howells, Dr Kim


Corston, Ms Jean
Hoyle, Lindsay


Cotter, Brian
Hughes, Ms Beverley (Stretford)


Cox, Tom
Hughes, Kevin (Doncaster N)


Cranston, Ross
Hughes, Simon (Southwark N)


Crausby, David
Humble, Mrs Joan


Cryer, Mrs Ann (Keighley)
Hutton, John


Cryer, John (Hornchurch)
Ingram, Adam


Cummings, John
Jackson, Ms Glenda (Hampstead)


Cunningham, Jim (Cov'try S)
Jackson, Helen (Hillsborough)


Dafis, Cynog
Jamieson, David


Dalyell, Tam
Jenkins, Brian


Darling, Rt Hon Alistair
Johnson, Alan (Hull W & Hessle)


Darvill, Keith
Johnson, Miss Melanie (Welwyn Hatfield)


Davey, Valerie (Bristol W)



Davidson, Ian
Jones, Helen (Warrington N)


Davies, Rt Hon Denzil (Llanelli)
Jones, Ms Jenny (Wolverh'ton SW)


Davies, Geraint (Croydon C)



Davies, Rt Hon Ron (Caerphilly)
Jones, Jon Owen (Cardiff C)


Davis, Terry (B'ham Hodge H)
Jones, Dr Lynne (Selly Oak)


Dawson, Hilton
Jones, Nigel (Cheltenham)


Dewar, Rt Hon Donald
Jowell, Ms Tessa


Dismore, Andrew
Keeble, Ms Sally


Dobbin, Jim
Keen, Ann (Brentford & Isleworth)


Donohoe, Brian H
Keetch, Paul


Dowd, Jim
Kelly, Ms Ruth


Drown, Ms Julia
Kennedy, Charles (Ross Skye)


Dunwoody, Mrs Gwyneth
Kennedy, Jane (Wavertree)


Eagle, Angela (Wallasey)
Khabra, Piara S


Eagle, Maria (L'pool Garston)
Kilfoyle, Peter


Edwards, Huw
King, Andy (Rugby & Kenilworth)


Efford, Clive
King, Ms Oona (Bethnal Green)


Ellman, Mrs Louise
Kingham, Ms Tess


Ennis, Jeff
Kirkwood, Archy


Etherington, Bill
Lawrence, Ms Jackie


Fisher, Mark
Laxton, Bob


Fitzsimons, Lorna
Leslie, Christopher


Flint, Caroline
Levitt, Tom


Flynn, Paul
Lewis. Ivan (Bury S)


Foster, Don (Bath)
Liddell, Mrs Helen


Foster, Michael Jabez (Hastings)
Linton, Martin


Foster, Michael J (Worcester)
Livsey, Richard


Foulkes, George
Lock, David


Fyfe, Maria
Love, Andrew


Gapes, Mike
McAvoy, Thomas


George, Bruce (Walsall S)
McCabe, Steve


Gerrard, Neil
McCafferty, Ms Chris


Gilroy, Mrs Linda
McDonagh, Siobhain


Godsiff, Roger
McDonnell, John


Goggins, Paul
McFall, John


Gordon, Mrs Eileen
McGuire, Mrs Anne


Gorrie, Donald
McIsaac, Shona


Griffiths, Jane (Reading E)
McLeish, Henry


Griffiths, Nigel (Edinburgh S)
Maclennan, Rt Hon Robert


Griffiths, Win (Bridgend)
McNulty, Tony


Grocott, Bruce
MacShane, Denis


Gunnell, John
Mactaggart, Fiona


Hain, Peter
McWalter, Tony


Hall, Mike (Weaver Vale)
Mallaber, Judy


Hamilton, Fabian (Leeds NE)
Marek, Dr John


Hancock, Mike
Marsden, Paul (Shrewsbury)


Hanson, David
Marshall, Jim (Leicester S)


Harman, Rt Hon Ms Harriet
Marshall-Andrews, Robert


Harris, Dr Evan
Meacher, Rt Hon Michael


Hepburn, Stephen
Meale, Alan


Heppell, John
Merron, Gillian


Hesford, Stephen
Michael, Alun


Hewitt, Ms Patricia
Michie, Bill (Shef'ld Heeley)


Hill, Keith
Milburn, Alan


Hinchliffe, David
Miller, Andrew


Hoey, Kate
Mitchell, Austin


Home Robertson, John
Moffatt, Laura


Hoon, Geoffrey
Moonie, Dr Lewis


Hope, Phil
Moore, Michael


Hopkins, Kelvin
Moran, Ms Margaret






Morgan, Ms Julie (Cardiff N)
Savidge, Malcolm


Morgan, Rhodri (Cardiff W)
Sawford, Phil


Morley, Elliot
Sedgemore, Brian


Morris, Ms Estelle (B'ham Yardley)
Shaw, Jonathan


Mountford, Kali
Sheerman, Barry


Mudie, George
Sheldon, Rt Hon Robert


Mullin, Chris
Short, Rt Hon Clare


Murphy, Denis (Wansbeck)
Singh, Marsha


Naysmith, Dr Doug
Skinner, Dennis


Norris, Dan
Smith, Angela (Basildon)


Oaten, Mark
Smith, Miss Geraldine (Morecambe & Lunesdale)


O'Brien, Bill (Normanton)



O'Brien, Mike (N Warks)
Smith, Jacqui (Redditch)


O'Hara, Eddie
Smith, John (Glamorgan)


Olner, Bill
Smith, Sir Robert (W Ab d'ns)


O'Neill, Martin
Soley, Clive


Öpik, Lembit
Southworth, Ms Helen


Palmer, Dr Nick
Spellar, John


Pearson, Ian
Squire, Ms Rachel


Perham, Ms Linda
Starkey, Dr Phyllis


Pickthall, Colin
Steinberg, Gerry


Pike, Peter L
Stewart, Ian (Eccles)


Plaskitt, James
Stinchcombe, Paul


Pond, Chris
Stoate, Dr Howard


Pope, Greg
Strang, Rt Hon Dr Gavin


Pound, Stephen
Straw, Rt Hon Jack


Prentice, Ms Bridget (Lewisham E)
Stringer, Graham


Prentice, Gordon (Pendle)
Stuart, Ms Gisela


Prosser, Gwyn
Sutcliffe, Gerry


Purchase, Ken
Taylor, Rt Hon Mrs Ann (Dewsbury)


Quinn, Lawrie



Radice, Giles
Taylor, Matthew (Truro)


Rammell, Bill
Thomas, Gareth (Clwyd W)


Rapson, Syd
Thomas, Gareth R (Harrow W)


Raynsford, Nick
Timms, Stephen


Reed, Andrew (Loughborough)
Todd, Mark


Reid, Dr John (Hamilton N)
Touhig, Don


Rendel, David
Truswell, Paul


Robertson, Rt Hon George (Hamilton S)
Turner, Dennis (Wolverh'ton SE)



Turner, Dr Desmond (Kemptown)


Roche, Mrs Barbara
Turner, Dr George (NW Norfolk)


Rooker, Jeff
Twigg, Stephen (Enfield)


Rooney, Terry
Tyler, Paul


Rowlands, Ted
Vaz, Keith


Ruane, Chris
Vis, Dr Rudi


Ruddock, Ms Joan
Wallace, James


Russell, Bob (Colchester)
Walley, Ms Joan


Russell, Ms Christine (Chester)
Wareing, Robert N


Ryan, Ms Joan
Webb, Steve


Sanders, Adrian
White, Brian





Wicks, Malcolm
Wise, Audrey


Williams, Rt Hon Alan (Swansea W)
Wood, Mike



Woolas, Phil


Williams, Alan W (E Carmarthen)
Worthington, Tony


Williams, Mrs Betty (Conwy) 
Wright, Dr Tony (Cannock)


Willis, Phil



Wills, Michael
Tellers for the Noes:


Winnick, David
Mr. Graham Allen and


Winterton, Ms Rosie (Doncaster C)
Mr. Clive Betts.

Question accordingly negatived.

It being after Ten o'clock, further consideration of the Bill stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
That, at this day's sitting, the School Standards and Framework Bill and the Wireless Telegraphy Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Pope.]

Question agreed to.

As amended (in the Standing Committee), again considered.

Further consideration of the Bill adjourned.—[Mr. Pope.]

Bill, as amended (in the Standing Committee), to be further considered tomorrow.

Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. I have had a letter from the Leader of the House asking me to withdraw a remark that I made in a point of order to Madam Speaker earlier today, and I am pleased to do as she requests. I said that the right hon. Lady had admitted to losing a letter that I had sent her, about getting letters answered in a sensible time by Ministers. She has written to remind me that in fact she said that her office had not received my letter of 21 January. She is an honourable Lady and I must accept that that is what happened, so I am happy to withdraw my earlier remark, but clearly we must have an inquiry as to why letters to Ministers are going astray.

Mr. Deputy Speaker: Madam Speaker will have noted the hon. Gentleman's withdrawal of his earlier remarks.

Orders of the Day — Wireless Telegraphy Bill [Lords]

As amended (in the Standing Committee), considered.

New clause 1

ACCESS TO INFORMATION

'Any information held by the Radio Communications Agency relating to the assignment of the spectrum, shall be made available on request to the Spectrum Management Advisory Group and to users of the spectrum.'—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Tim Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael Lord): With this, it will be convenient to discuss amendment No. 9, in clause 5, page 5, line 4, at end insert
'and shall be listed in the annual report of the Radio Communications Agency.'.

Mr. Boswell: One or two hon. Members may be aware that I have been a long-standing supporter of Aston Villa football club, whose motto is, "Be prepared". It is a principle in this place that one should be prepared for anything, as I am sure the Government are at this hour tonight, after the wise passing of the 10 o'clock motion.
It is with some gratitude, as well as trepidation, that I avail myself of the opportunity for the first time to involve myself in matters concerned with wireless telegraphy. In doing so with all due diffidence, I defer to my hon. Friend the Member for South Dorset (Mr. Bruce), in respect of his technical expertise, and my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), in respect of his legal and administrative expertise, as well as to their knowledge of the subject and participation in the Standing Committee. To use a story that my hon. Friend the Member for South Cambridgeshire related to the Standing Committee, no doubt any No. 404 web server errors on my part will be duly and immediately corrected by one or the other of them.
I would not wish to cause any undue trepidation by my arrival at the Dispatch Box. Although I have already announced my football allegiance, my cricketing allegiance is to my county of birth, which is Essex. One of the most distinguished cricketers of yesteryear in that county and an Essex man indeed was the late J.W.H.T. Douglas—"Johnny won't hit today". Unless severely provoked, I was not going to set myself up in the role of being typecast as Mr. I.W.G.L.T. of Daventry— I.W.G.L.T. standing for, "It will go late tonight". However, I am deeply encouraged by the support that I am receiving from my hon. Friends in that part.
I have to admit that these matters were clearly exquisitely debated on Second reading and in Committee. The Government had a certain lead provided by their predecessor in this matter and had the benefit of wise advice in those considerations.
The new clause and the amendment seek further elucidation of the Government's position and reinforce our determination to ensure that the changes, which we do not oppose in principle, are genuinely for the assistance of users and consumers of the spectrum.
New clause 1 represents a welcome to the Government's initiative in setting up a spectrum management advisory group. We want the Government to provide as soon as possible further details of their thinking on the operation of the group. We offer them the opportunity to start sharing those details tonight. If the group is to represent users and to function properly, its members must have access to information—that is the purpose of the new clause. In complimenting my hon. Friends who drafted the new clauses, I should say that mostly they are written in plain English, so that even I can understand them.

Mr. Eric Forth: I hope that I am not pre-empting anything that my hon. Friend is going to say, as I may have been slightly guilty of doing so on a previous occasion. The new clause specifically says that
information…shall be made available on request to
something called the
Spectrum Management Advisory Group and to users of the spectrum".
Does that imply that information would be in the public domain, or does he intend that it should be more restricted? It is important that that is cleared up early on.

Mr. Boswell: My right hon. Friend has an amazing capacity for anticipating questions that even I have asked myself and, indeed, of which I was modestly hoping to dispose. Either he has some power of telepathy, which may be useful in relation to spectrum matters, or, conceivably, he has particularly keen eyesight and can read my notes over my shoulder.
As I said, the advisory group must have access to information to function properly. That information will usually be properly releasable to the group and into the public domain. It may be necessary to make provision for cases in which there are aspects of that information that are properly available only in confidence.

Mr. Ian Taylor: Will my hon. Friend give way?

Mr. Boswell: I readily give way to my hon. Friend the Member for Esher and Walton (Mr. Taylor), whom we are pleased to see in the Chamber because of his close involvement with these matters in the previous Administration. His undoubted expertise will assist us in our deliberations.

Mr. Taylor: I am grateful to my hon. Friend the Member for Daventry (Mr. Boswell), the Conservative Front-Bench spokesman on this issue. Before we experience the full charge of the radio waves between my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and him—which I am sure will lie at a very high part of the spectrum and so should be attractively priced from the point of view of the revenues that could be raised— I remind Conservative Members that they should take credit for the Bill. We drafted it, we nurtured it and, in many cases, we would have removed many of the difficulties, not all of which have been perfectly translated by the Government. The industry has shown by its responses that it takes a keen interest in


the Bill. The Government have undoubtedly picked up an interesting piece of legislation, but it requires the scrutiny that my hon. Friend is about to give it.

Mr. Boswell: I am most grateful to my hon. Friend, not least for his previous contribution, but also for the contribution that I am sure he will make tonight. The Bill builds on his personal achievement in taking these matters forward, but, as he has very generously, and with characteristic modesty, conceded, everything—even a good idea from a Conservative Government—brooks examination and may be capable of improvement.
In tabling the new clause, we are saying that it may be sensible to provide in the Bill for the release of information either under controlled conditions, or directly into the public domain, so that the spectrum management advisory group can consider how things are going. The new clause certainly gives the Minister an opportunity to say how she believes information should be released.
If the group is to do that job properly, it is essential that the information is provided. That is the major reason for the new clause, but a second and important one is that, taking the Government's declared philosophy of freedom of information, information should not be withheld by the Government unless there is a compelling reason for doing so.
We sometimes have difficulties in getting information from the Government and in getting answers to our questions, but that is something that we hope to underline by introducing our new clause.

Mr. Forth: Will my hon. Friend give way before he leaves that point?

Mr. Boswell: I readily do so.

Mr. Forth: Does my hon. Friend expect that the Government will accept the new clause? It strikes me as somewhat odd, following what he has said, that, if the Government really believed in the oft-repeated philosophy of open government and freedom of information, such a provision would have been built into the Bill from the outset. Does my hon. Friend know why it has to be our new clause that puts into effect the Government's own philosophy? Why was it not in the Bill already?

Mr. Boswell: My right hon. Friend raises an interesting point. If there are occasions when Opposition Members have been guilty of paranoia in finding it surprising that Ministers have not accepted our entirely reasonable amendments to other legislation, that does not mean that they were not out to get us. I really do not know why the Government did not include such a provision from the start. The Minister has an opportunity of redeeming herself by explaining tonight why it should not be accepted.

Mr. David Davis: Will my hon. Friend give way?

Mr. Boswell: Yes. We are anxious to make progress on these Benches, but I give way to my right hon. Friend.

Mr. Davis: I thank the Opposition spokesman for being so kind. May I bring him back to the point raised earlier

by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) about the extent to which the information given to the spectrum management advisory group should be made public?
Giving information to a narrow group or industry group can create a barrier to entry. That is the sort of thing that the Conservative party always tries to prevent. We want to see the maximum possible competition. Surely we should draft the Bill to ensure competition by making the information available to all, not just to some narrow industry group.

Mr. Boswell: Indeed, Conservative Members are believers in open government for the many, not for the few. My right hon. Friend the Member for Haltemprice and Howden (Mr. Davis) performs a very reasonable task in making that point. He is essentially saying—this would be my merit order, if I may borrow another analogy—that the ideal is the release of information into the public domain. The second best is release of the information to the spectrum management advisory group, if that is as far as it may properly go. The third best—I fear that that is where the Government are unless they accept our new clause—is simply to keep the information in house.

Mr. Ian Bruce: One should give acknowledgement to the Government. Between proceedings in the other place and here, the industry was keen to see a spectrum management advisory group set up. The Government, by press release, said that they would set one up. I hope that now, because of the amount of time that has elapsed, the Government have been able to think again. Nowhere in the Bill does it say that the group will be set up. My hon. Friend rightly says that we do not know who will be members of the group. Will it be just a few Labour councillors, as there are on most quangos being setting up now, or will it really be representative?

Mr. Boswell: My hon. Friend and I share the common objective of preventing the group from being merely a press release. We do not want what I might call a metaphorical spectral spectrum management advisory group. We want a real one and we want to hear more details of it than have been given to us so far. But, of course, I defer to the Minister. She is an honourable Lady. I am sure that her intentions are entirely of the best, but her explanations are urgently required.
In that spirit, I shall not detain the House very much longer on this group, but I wish to refer to amendment No. 9, which is bracketed with new clause 1. The amendment provides for some transparency in the issue of grants. If they are to be issued for research and to take forward the use of a limited national resource, the spectrum, they must be seen publicly to be used to best effect. That is an important matter of accountability, and my right hon. Friend the Member for Haltemprice and Howden will be as concerned with it as anyone.
Some years ago, I chaired a grant-making charitable trust. We always gave considerable details of our modest grants in our annual report.

Mr. Edward Leigh: Has my hon. Friend noticed that sitting behind him are no fewer than three former Ministers who were associated with the


Radiocommunications Agency and laid the foundations for the Bill? Does that prove that for new Labour, one can read old Conservative—with one difference: we are more committed to open government than are Ministers of the so-called open Government?

Mr. Boswell: I would not wish my hon. Friend to tempt me too far. The Government are clearly on message tonight.
It is important that there should be the maximum possible transparency. It is somewhat distressing that a Bill that received a Second Reading as long ago as 29 October should have mouldered until now, before its further consideration. There was a Committee stage, but that took place in the middle of November, long before I joined the shadow Department of Trade and Industry Front Bench. Some of us have been preoccupied with one or two other considerations up till now, but we are pleased to be here to discuss the Bill.
We are here not to fight the principle, but to ensure that the details are properly secured. Like any proper attitude to legislation, those details should begin with a commitment to the maximum openness of information. That is the purpose of the new clause.

Mr. Andrew Lansley: I am grateful for the opportunity to support my hon. Friend by speaking to new clause 1. The issue of access to information arising from the Bill was discussed a little in Committee, but the discussion tonight can be more focused, now that it is clear that the Government's intention is to establish a spectrum management advisory group. It is incumbent on the House to consider the purposes for which that is to be used. The adoption of the new clause would improve the Bill and would implement the Government's intentions.
The principle of openness in respect of telecommunications activities is well established. As the Minister will know, the Telecommunications Act 1984 began a process of increasing transparency in the issue of licences, which has greatly benefited the telecommunications industry. It has not helped one competitor to obtain an advantage of information over another, but, for reasons that were made clear by my hon. Friend the Member for Daventry (Mr. Boswell), transparency in the marketplace and availability of information are essential to create a better marketplace.
We are moving through the system of spectrum pricing to a device that is intended to create a market. If it is our intention to create a market, we must provide the mechanisms that help to make markets work more effectively. Pre-eminent among those is the availability of information. A market in which there is differential information among those participating is a distorted market.
It would be remiss of us to agree to a Bill whose later clauses should be based on a high level of transparency for those who are putting in bids for auctions for spectrum allocation, if the information available to them would be inadequate.
One or two issues have arisen, and it might be helpful if the Minister referred to them. First, I wish to refer to the Radiocommunications Agency's database. I do not profess to be sufficiently expert to be able to articulate

the concerns in detail, but there is concern in the industry that the amount of information available on the database, the form in which it is available, and the reasons for agency decisions—for example, in relation to the assignment of applications for fixed links and the plotting of fixed links across the country—may not be sufficient. We ought to look through the database for greater understanding of the allocation of spectrum, the reasons why spectrum has been allocated to particular purposes and the reasons why applications for particular spectrum or fixed links have been turned down.

Mr. Ian Bruce: Has not the Radiocommunications Agency always been a technical organisation—looking after worries about signals interfering with one another—but is now having to move to a market-sensitive role? The user group was clearly designed to help the agency come up with the right decisions. The Government must tell us how they will extend the agency to allow it to fulfil these new functions.

Mr. Lansley: My hon. Friend makes a good point which will inform our discussions as we proceed through Report. The agency—with which I have had dealings in the past—has acknowledged expertise and produces a fine service in relation to the technical management of the spectrum. However, we are looking towards a different structure, which includes an assessment of economic and consumer benefits, and so on. This pre-empts slightly discussions on subsequent new clauses and amendments, but it is relevant to this new clause.
Within the responsibility for the assessment of consumer benefits and the allocation of spectrum on the basis of bids—and the more efficient management of spectrum for economic, and not simply technological, purposes—is an understanding of the marketplace within which the operators—those making applications to the agency—are having to work. There is considerable sensitivity in the industry which wants assurances about the degree of information it will receive.
Can the Minister assure the House that, in planning and implementing changes to the agency's database, the amount of information available to operators will be at least as full as is available at present? Secondly, in designing the database and the relationship that operators will have with it, will she work closely with the industry to ensure that that is achieved to the maximum? The spectrum management advisory group will doubtless have a role, but the Minister must look beyond that group to the industry more generally.
My second point is that, after the Committee stage, it was put to me that some transparency in the way in which the agency assigns links would be highly desirable, but there was concern that information being acquired by the agency was not necessarily being put into the public domain where it might have had greater value than it has simply resting with the agency and the Department.
Particular reference was made to a report—commissioned, I am told, by the Radiocommunications Agency—carried out by the university of Bristol. It was designed to look into calculating spectrum congestion as part of research into trying to understand on what basis one can implement excess, not administrative, pricing to try to manage spectrum better. One needs an understanding of how spectrum congestion has occurred.
It was suggested that the report could be published, but, at that time, had not been. Is the Minister aware of the report and the effect that it might have on the calculation of spectrum congestion? Perhaps it is appropriate for the report to be put into the public domain, in the spirit of openness encouraged by new clause 1. I hope that that is the Department's intention.
I shall rest on those two questions and the general proposition that not only is it desirable that the availability of information should be encouraged specifically through the spectrum management advisory group, but information should go beyond that, into the industry to ensure that, when we discuss spectrum allocation, the market is fully informed through an understanding of the ways in which the agency allocates spectrum, and the terms of the licences that it offers.
Licences are confidential documents between the agency and the operator. That is perfectly legitimate, but, in the marketplace, transparency in licensing has become the norm in relation, for example, to telecommunications operators. There is a case for transparency to be carried through into the agency's licences as well.

Mr. Ian Taylor: I wish to add just a few words, particularly on access to information.
Although it does not look like it, the Bill is a dramatic step forward in how we manage a scarce resource—radio spectrum. Radio spectrum is something which people cannot see, so they do not necessarily think that it has any great value, but it has enormous implications for the running of the economy in an age of digital communications, most of which will increasingly use the radio spectrum in some form to effect those communications.
The Bill also begins the transformation of the merger of fixed and mobile telephony. It will have a big impact when we move to digital television, which will free up a lot of local spectrum because the same amount of power around a particular transmitter will not be needed. The analogue spectrum needs to be kicked on from transmitter to transmitter, which creates great local disturbance. Digital signals are much clearer and travel further, and therefore will give back a considerable amount of spectrum, which we can use successfully. The way in which we use it, however, should be a function of market pricing.
In each of the areas that we are talking about, the public will need to understand fully what is going on. The Bill does not introduce a hidden tax. It is not some method used by the Government to penalise people. It is, dare I say it, a Conservative measure designed to use the market to enable a scarce resource to be properly managed between willing users.

Dr. Nick Palmer: On Second Reading, we were slightly surprised that the shadow Secretary of State reversed the pledge in the Conservative manifesto and opposed the measure, saying, in contrast to what we have just heard, that the Bill introduces a disguised tax. Most other Conservative Members who spoke supported that view.
However, it seems that tonight, we shall hear a reversal, and that most Conservatives will take the opposite view. I am curious about whether those mass conversions

happen individually, or whether the Conservatives have a sort of session, as the Reverend Moon does in South Korea, and it all happens simultaneously.

Mr. Deputy Speaker: Order. Before the hon. Gentleman responds to that intervention, I must point out that we are now going rather wide of the mark. I remind him that both the new clause and the amendment are tightly drawn.

Mr. Taylor: I accept your ruling, Mr. Deputy Speaker. Far be it from me to enter into a discussion about the shadow Minister in any case. We do not always agree, but I am sure that on that occasion, he was merely probing to find out what the Government's intentions really were.

Mr. Boswell: Will my hon. Friend take a little advice from me, as I am a former Whip? If he praises the Bill too intensely, the Government may have a deathbed conversion to old Labour and suddenly decide that they favour it less—something which I am sure my hon. Friend would wish to avoid.

Mr. Taylor: I was allowing ample opportunity for my hon. Friend to probe deeply into the measures, about which he has obviously thought carefully, and the proposed amendments. No Bill, whatever its origin, is perfect, and it is the job of the House to consider closely what its impact will be. The Bill is important, which is why I am anxious that we should have as much public information as possible. However, much as I support my hon. Friend's probing, I remind him that he had already said that he approved of the principle of the Bill. That is the general point on which I rest.
I certainly welcome the measure in terms of the discussion and the spectrum management advisory group, but I urge the Minister to ensure that, as my hon. Friend has said, as much of the information that can be made public will be. I used to have ministerial responsibility for such matters, but sadly, the Minister now has that responsibility and I do not. Both of us, as well as my hon. Friend the Member for Gainsborough (Mr. Leigh), have at one time been responsible for the Radiocommunications Agency.
For reasons that we shall not debate in the Chamber, some of the agency's work is not capable of being put into the public domain, but that is not true of areas in which there will be a dramatic move forward and a new system of management, and in which we shall also need an understanding of what will and will not be fair. When we are not auctioning but merely introducing administrative pricing, there will be a need not only for an advisory group, but for public confidence in its work. That is why I endorse the questions asked by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), which were most pertinent.

Mr. Ian Bruce: First, I declare a financial interest in that I am a paid adviser to the Telecommunications Managers Association. However, I also make it clear that I have had no briefing on the Bill from the association, and that I speak only for myself, from my own knowledge of the issues.
I am grateful for the congratulations that were offered to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) and me on our drafting of the amendments and new clauses, but I must admit that much of what I have produced in that line comes directly from Oftel's views on the future of spectrum pricing. The quality of the drafting is, as always, due to the Table Office, which turns one's thoughts into proper parliamentary language, and I hope that the way in which the amendments and new clauses read will be clear enough to enable hon. Members to discuss the issues.
This week, several people have made such comments as, "There's that fellow Bruce again, going in to bat throughout the night," so may I also tell the House that the Opposition have no intention of delaying things, filibustering or anything else. The only reason why we are speaking on the amendments and new clauses at this time of night is that the Leader of the House and the other powers that be have decided to schedule important Department of Trade and Industry Bills after other Bills have been dealt with.

Mr. Boswell: For the record, does my hon. Friend accept that Opposition Front-Bench Members and, in my experience, Back-Bench Members too, never intend to delay the consideration of a Bill? We are anxious to give any Bill merely that consideration which the issues that it raises and its importance properly deserve, and that is exactly what we shall do tonight.

Mr. Bruce: I was certainly not accusing my hon. Friends of filibustering. I do not want to go wide of the narrow amendments in explaining our position. These are important matters. I would much rather be at home with a glass of Scotch in front of the television—would not we all?—than here with a glass of water having to speak at this late hour. However, anyone who was present for the Report stage of the Fossil Fuel Levy Bill yesterday will have heard the best speech in the Chamber this year, and possibly since 1 May, when the hon. Member for Bolsover (Mr. Skinner) spoke so eloquently.
I am glad to see still in his place the hon. Member for Sheffield, Attercliffe (Mr. Betts). There is only one Whip for the Department of Trade and Industry and he seems to be here all the time. It has been suggested that that may be because the hon. Gentleman is being punished by his party for not running the National Minimum Wage Bill in quite the way that was expected. However, I hope that he has a restful week next week.
I am grateful for your indulgence, Mr. Deputy Speaker, in allowing me to make those general remarks. However, I want specifically to talk about the spectrum management advisory group. As I said in an intervention earlier to my hon. Friend the Member for Daventry (Mr. Boswell), that is the creature of the Government. The industry, and certainly the Federation of Communication Services which, at various times, has briefed me, have made it clear that they felt that it was extremely important that there should be some form of industry group which would advise the Radiocommunications Agency, so that any commercial clashes or problems could be ironed out before they affected the industry.
I am glad that Labour Members are now great enthusiasts for the free market in telecommunications. We shall not remind them what happened during the

privatisation of British Telecom; that is much too wide of the mark. However, we genuinely welcome their conversion.
At the beginning of the Bill's passage through the House, the Government said that they were persuaded that there should be an advisory group, but there is still no flesh on the bones of that. The new clause seeks to tease out from the Government what they are thinking, and to put on the record the fact that without some mechanism to ensure that the spectrum management advisory group is privy to information, it will not get anywhere.
Unless an advisory group believes that there is a genuine dialogue between those with power and those who are simply advisers, it will take its bats home. If it is not listened to, and without the information that it needs to do its job, its members will wonder what is the point of giving up their time. I suspect that the members of this advisory group will be volunteers. With your indulgence Mr. Deputy Speaker, I hope that the Minister will tell us who will be on that body. There is always the worry—

Mr. Deputy Speaker: Order. The hon. Gentleman is pushing my indulgence a little too far. Will he now stick tightly, please, to the new clause?

Mr. Bruce: It is important that we know who will be on the group, and that it will be a wide spectrum—[Interruption.] I apologise; that was an unintended pun. Industry may come to the Government and say, "This is wonderful; it is exactly the group that we want", and agree what sort of information will be exchanged—but in all that cuddling of each other, no one will remember to say, "What about the consumer?" What about people who do not have technical knowledge, but who want information about how spectrum is being divvied up—so that it is not just good for the Government and the industry, but in the public interest? I know that the Government are keen to say that they want to do things in the public interest, and that is what we want to hear now.
I appreciate that this is a narrow group of amendments, so, without further ado, I shall sit down and hope to hear the Minister say that she has been persuaded by our arguments on new clause 1, and that she will set us on the right track for this evening's business by accepting it.

The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche): I welcome the hon. Member for Daventry (Mr. Boswell) not to his responsibilities, but to the issue before us. This has been Department of Trade and Industry week in the House. I understand that the hon. Gentleman was in the Chamber yesterday evening listening to the right hon. Member for Wokingham (Mr. Redwood) and that he had a little difficulty keeping awake during his right hon. Friend's speech. I heartily congratulate the hon. Gentleman on managing to keep awake for his own remarks.
I am pleased that the hon. Member for Esher and Walton (Mr. Taylor) is here this evening, as I agreed with many of his remarks. He played a large part in the initial development of the Bill. I share his view that, on the surface, this does not appear to be the most exciting of Bills, but I am sure that he and other hon. Members here tonight agree that in terms of economic growth, wealth creation and job creation, it is vital to the country.
I welcome the remarks of the hon. Member for Daventry on the principle of the Bill. It was right and proper of him to probe its effects. I also welcome the


Opposition's U-turn. I remind the hon. Gentleman of what the right hon. Member for Wokingham said on Second Reading:
We shall oppose it, but we shall not jeopardise business because I shall shortly reveal to the Minister how to handle the matter much better…
The Bill sums up all that is wrong with the Department of Trade and Industry. It is bad for business and will cost us jobs and technical leadership. It is mean-minded".—[Official Report, 29 October 1997; Vol. 299, c. 933–41.]
How extraordinary it is, but I am always glad when sinners repent.

Mr. Boswell: I thank the hon. Lady for giving way and for taking such care to read the speeches of my right hon. Friend the Member for Wokingham (Mr. Redwood) in such detail and then relaying them to the House.
Does the hon. Lady appreciate that one of the major elements of our concern about the Bill is the cost to business of the proposed changes unless there are better safeguards for the possible charging regime—a matter which does not arise on this new clause but which we shall discuss in a moment.

Mr. Deputy Speaker: Order. Can we therefore, for the time being at least, stick to the new clause that we are discussing?

Mr. Boswell: I think that my intervention is immediately germane to what the Minister said. Will she accept that my right hon. Friend did not seek to divide the House on Second Reading?

Mrs. Roche: Indeed. That is exactly what I said; but the right hon. Gentleman said, "We shall oppose it." I pay tribute to other Conservative Members, who did not take that course. There was a reversal of attitude in Committee, when industry representatives made it known to them how much they disagreed with their original stance.
I am not in a position to accept the new clause or the amendment, but I hope that by offering some explanation and assurance I can persuade Conservative Members not to press them to a vote. I believe that both are unnecessary and would add nothing to the rights of spectrum users, and that the new clause would give rise to difficulties for the industry.
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The Radiocommunications Agency is fully committed to transparency in its management of the radio spectrum and makes available a great deal of information to users. I am sure that the hon. Member for Esher and Walton agrees, as he has had responsibility for it in the past. The agency's commitment is demonstrated by the extensive consultation that it already undertakes through a network of standing consultative committees and through ad hoc consultation exercises such as that currently under way on implementing spectrum pricing. That will be further reinforced by clause 6. The agency also publishes and consults on a comprehensive survey of the use of the radio spectrum.
The new clause would do nothing to help users. The Radiocommunications Agency already makes information available in accordance with the requirements of the code

of practice on access to Government information and data protection. That means that it already provides information on request, subject to overriding considerations such as national security, law enforcement or commercial confidentiality: matters which are not recognised in the amendment.

Mr. Boswell: In no sense do I want to entrap the Minister in my question, but will she confirm that, at least broadly, the categories that she has outlined represent the limits under which the agency operates in restricting information and that, by implication, all other information is already released?

Mrs. Roche: In the main, yes. I understand entirely what the hon. Gentleman is saying, and I appreciate the spirit in which he says it. The agency is committed to transparency.
Greater access to the agency's database of assignments was raised in a wide-ranging public consultation in 1994. The responses showed significant concern about national security and commercial confidentiality, as one would expect. It would be possible for a competitor to gain information from the database about frequencies used and the disposition of transmitters, and hence the extent and nature of licensees' businesses, which could be very damaging commercially.

Mr. Ian Bruce: I want to explore the other side of the argument that most of the information is already available to the public generally. Might not there be a problem about information that is quite properly given in confidence to an advisory group but would not normally be given out generally? The agency might not have the power to do that.

Mrs. Roche: I do not think that there is a problem. There are many examples of circumstances in which, within the restrictions of the code, one tries to give as much information as possible. When a special advisory group is charged by Government with a special function, it is perfectly proper, and indeed not unusual, for confidential information to be released to that group. When the Bill was discussed in the other place, similar concern was expressed by Lord Derwent—who takes the Conservative Whip there—on behalf of mobile telephone operators. He explained that operators would not wish detailed information about matters of this kind to be released. He made that point very strongly.
The new clause does not provide safeguards for licensees, such as law enforcement agencies and security companies, that have a legitimate reason not to disclose details of their assignments in case the information assists criminals. I am sure that all hon. Members want the status quo to be protected. The agency is continuing to develop plans for greater access to its databases, but it must have regard to the sensitivities of licensees who have legitimate reasons for wishing information about their assignments not to be made available.

Mr. Lansley: Will the Minister give way?

Mrs. Roche: Just one more time.

Mr. Lansley: I am grateful to the Minister, who is being generous in giving way. Does she acknowledge that


while both sides of the House understand the commercially confidential issues that the industry—quite properly—wants to be protected, that must be balanced against the interests of those who want to enter a market? Does she agree that we must not go too far and allow the protection of information in the marketplace to become a barrier?

Mrs. Roche: I could not agree more. In all such matters, a balance must be struck. We must ensure that there is a market for new entrants: that is how competition is promoted. On the other hand—quite legitimately—commercial confidentiality must be protected. As the hon. Gentleman will know, such issues crop up all the time, not only in relation to management of the spectrum and the Radiocommunications Agency but in relation to other matters.
The new clause requires information to be made available to the spectrum management advisory group. I am glad that the group was mentioned, because it was an initiative of the present Government. Indeed, the idea was raised in another place. I see that the hon. Member for South Cambridgeshire (Mr. Lansley) agrees. Quite properly, the Government went away and considered the matter. I am delighted with the approval that has been given to the establishment of the group. I intend it to have a significant input in matters relating to the management of the of the radio spectrum.
We have continued the work of setting up the group since my earlier announcement. I am pleased to say that Dr. John Forrest has agreed to become its first chairman. Dr. Forrest will bring to his position wide experience of radio use in the defence, broadcasting and telecommunications industries, and I am confident that he is ideally qualified to lead the group in its task of providing Ministers with independent strategic advice on the management of the radio spectrum. Tomorrow, I will place in the Libraries of both Houses a list of members of the group. Between them, they represent a wide range of experience and expertise covering all the major categories of spectrum user. I think it important for the group to have direct access to Ministers, and I look forward to working with it in the coming months.

Mr. Ian Taylor: This is only a mild criticism, but in a way it would have been helpful to have the list this evening. However, I welcome Dr. John Forrest to the chair of the spectrum management advisory group. I also recognise that this proposal has emerged since the general election.
When, as a Minister, I consulted representatives of industry—not an advisory group as such, but a group of people who were advising—it was clear that information could also be publicly disseminated through improved ways of managing the spectrum and securing the efficiency that is, after all, the objective of the Bill. Dr. Forrest ran NTL, formerly the ITV uplinking and networking station, and he is very experienced in the field. Perhaps he will encourage such developments.

Mrs. Roche: I am delighted that the hon. Gentleman has given such a warm welcome to Dr. Forrest's appointment. I think that it was a very good appointment. Although, as I said, I shall put the list in the Libraries of both Houses tomorrow, I should be delighted to help the hon. Gentleman by reading out a list of the other group members.
I have appointed also Dr. Mark Armstrong, who is the official fellow in economics at Nuffield college, Oxford; Professor Sue Birley, director of research and professor of entrepreneurship at the management school of Imperial college; Dr. Kevin Bond of Yorkshire Water; David Brown, chairman of Motorola; Keith Harlow, director of technology, BBC resources; Dr. Mohamed Ibrahim, chairman and founder of Mobile Systems International; Stephen Lowe, product development director of Eurobell Holding plc; Michael Short, director of international affairs for Cellnet; and Andrew Sleigh, director general of information and communication services in the Ministry of Defence.

Mr. Ian Bruce: They are Labour councillors.

Mrs. Roche: The chief executive of the Radiocommunications Agency will also be a member of the group.
I hope that that list will assist the House. I am sure that hon. Member for Esher and Walton will think so, as I am sure the hon. Member for South Dorset (Mr. Bruce) will rethink his remark. It is an extremely distinguished group, and I am absolutely delighted to announce their appointment.

Mr. Bruce: I assure the hon. Lady that it was a playful remark. Although some of the members may also be Labour councillors, I am sure that their expertise makes them better Labour councillors.

Mrs. Roche: I take the hon. Gentleman's remarks in the spirit in which they were intended.
In the light of my comments, I hope that the House will accept that new clause 1 is unnecessary and not press it to a Division.
Amendment No. 9 would require details of grants made under the powers in clause 5 to be listed in the annual report of the Radiocommunications Agency. I emphasise that we are committed to the principle of transparency in the operation of those powers, as we are in the operation of the Bill's other provisions.
The annual report of the Radiocommunications Agency accompanies the agency's annual accounts, which cover all the agency's income and expenditure. The accounts will in future refer to expenditure under the powers in clause 5, but not in more detail than is required by the various directives that govern the form of agency accounts.
I fully agree that additional information about grants paid or offered should be published in the agency's annual report, but I am concerned that the amendment would require an unhelpfully detailed level of information to be published, with the risk of detracting from the annual report's main messages. I do not want to give an undertaking that we will publish details of all grants, because some may be very small. It is possible, for example, that grants may be given to individuals, to assist towards training costs, and not only to businesses.
I certainly agree that it would be right for significant grants to businesses to be listed in the annual report, subject—as I am sure Opposition Members will agree—to considerations of commercial confidentiality. In the light of that assurance, I hope that the hon. Member for Daventry will not press the amendment.

Mr. Lansley: Will the hon. Lady assure the House that, whereas licences granted by the Radiocommunications


Agency to operators under the Wireless Telegraphy Act 1949 have been essentially confidential documents, licences granted under the Bill will be essentially public documents, from which material that is commercially confidential, for example, will be withheld? Does she expect that licences granted under the Bill will become public documents from which such information is withheld?

Mrs. Roche: The hon. Gentleman tempts me, but I shall stick strictly to discussion of the new clause and the amendment.
I hope that I have given assurances that Conservative Members can accept, but, if they are unable to do so, I ask my hon. Friends to reject new clause 1 and amendment No. 9.

Mr. Boswell: I am a little disappointed with the Minister's response, although I welcome the fact that, from time to time, she was complimentary to Opposition Members and to some of our ideas and concepts.
It is reassuring that, at this hour, early as it is, hon. Members are flooding into the Chamber. I am especially pleased to see that I have the assistance of my hon. Friend the Member for West Dorset (Mr. Letwin), who has joined our deliberations, and of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) who, if he knows about this subject 10 per cent. of what he knows about the national minimum wage, will again enliven and embellish our consideration.
I do not wish to prolong debate on this group of amendments.

Mr. Ian Bruce: It was remiss of my hon. Friend not to say that three members of the Liberal party are present and that we look forward to their contribution.

Mr. Boswell: I am grateful, but, in the interests of accuracy, I remind my hon. Friend that he means the Liberal Democrat party, not the Liberal party. I am sure that he did not wish to make an unfriendly remark. Those hon. Members are extremely welcome and I very much look forward to their contribution, if not to the debate on the current group of amendments—on which I now conclude my remarks—to the next.
The problem with the Minister's reply, in which she sought to twit us—which nettled me, because I explained in an intervention why I thought it inappropriate—was that it revealed that she did not understand the nature of opposition. It is the duty of an Opposition to oppose, not thoughtlessly—I am sure that, as she is a generous lady, she has never opposed us thoughtlessly—or in a knee-jerk way, but to find selected points of concern, to probe the Government and to seek a response from them.
To some extent, a response has been supplied. If nothing else, the debate has smoked out—or brought over the ether—an important announcement by the Minister on the membership of her new spectrum management advisory group. Although I do not know the gentleman personally, I have no reason to cavil at the appointment of Dr. John Forrest, and I have the endorsement of my hon. Friend the Member for Esher and Walton (Mr. Taylor) for that remark.
That announcement is extremely welcome and it seemed to me—although I have no precise knowledge of the individual members of the advisory group—that the Minister had assembled a group of big hitters with plenty of experience. I would simply say one thing about the appointments.
I am not clear in my mind about the group's status. It will advise the Radiocommunications Agency. I hope that it will be open to others with a public interest in this matter—such as Opposition Members of Parliament—to approach the advisory group to obtain briefings. In other words, I hope that the group is not regarded simply as advising Government or the agencies of Government.
I do not want to embarrass the Minister into a commitment that she may feel uneasy about making, but I hope that she will reflect on the fact that it is concomitant with the spirit in which the new clause was moved, of openness, transparency and proper exchange of information, that the advisory group should at least be able to talk to us. That would be helpful. Today, I had a very useful briefing from a non-departmental public body—the Advisory, Conciliation and Arbitration Service. It is extremely useful to have that type of relationship.
As my hon. Friends, with their technical expertise, have said, now that the group has been constituted, there is a real need for it to get to work as soon as possible, because some of these issues need early consideration. If the Bill is to make progress, we need to start taking some fairly early and strategic decisions about the allocation of the electromagnetic spectrum.
The Minister did her best to give reasonable assurances on the specific issues raised by the new clause and the amendment. My points about the duty of an Opposition to probe and tease out the Government's intentions are relevant here. As I understood her comments, the Government have no intention of withholding information that is in the public domain, and information will not generally be withheld unless there is an operational reason for withholding it.

Mr. Lansley: My hon. Friend will know the phrase, "The proof of the pudding is in the eating." Does he agree that it might help if the study by the university of Bristol on calculating spectrum congestion, to which I referred earlier, was put in the public domain if it is regarded as being of value in the agency? If it is not put in the public domain, perhaps we should be told why.

Mr. Boswell: Perhaps that could be resolved by the Minister or the chief executive of the Radiocommunications Agency writing to my hon. Friend with such information about the study as they are able to give.
The broad principle, which I hope is endorsed on both sides of the House, is that information should be in the public domain unless there is a compelling reason for it not to be. If there is a reason—such as national security or the commercial sensitivity of information given in confidence—we will understand that constraints are necessary, as I acknowledged in my opening remarks.
The Minister's assurance was helpful, but, as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) rightly said—miraculously anticipating my comments—the proof of the pudding will be in the


eating. We shall use the Minister's remarks as a template to test any withholding of information. We shall return them to her with interest if there is any dereliction from that duty. I am sure that the chief executive and the agency will read the report of the debate and take the comments to heart.
On amendment No. 9 and the release of information about grants, I have a slight feeling that Sir Humphrey may have been at work. I understand that the matter is difficult. We do not want a tedious list of ha'penny items, which, while important to the individuals involved, are less important in the national picture. The Minister gave a welcome assurance that, in broad terms—again with the term of art subject to considerations of commercial confidence—big items would be released. It might be helpful for her to consider inviting the agency to provide some details by generic type as an alternative to specifying each at tedious length.

Mr. Lansley: I am prompted by our discussions in Committee to suggest that responses to the agency's consultation document might be made available on the agency's web site. That would provide a vehicle through which information could be listed in sufficient detail for those who want it.

Mr. Boswell: Provided there is not a server error—as my hon. Friend said in Committee. My hon. Friend is right, although I respond jocularly. Putting material on the internet is cost free once the site has been set up. It would be available to technically sophisticated persons with inexpensive equipment. I notice my hon. Friend wrinkling his nose. He seems to be modestly implying that he is not technically sophisticated, but ever more of us are learning to use the internet.
We can call the debate a no-score draw—or perhaps a score draw. We have not achieved our objective of having the new clause and amendment adopted, but we have had some useful assurances which we shall use to test the future actions and intentions of the Government and the agency. With some reluctance because of my natural combativeness, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 2

EFFICIENT USE OF THE ELECTRO-MAGNETIC SPECTRUM

'.—The Secretary of State may reallocate any part of the electro-magnetic spectrum which he considers is not being used efficiently.'—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss the following: New clause 3—Substitution of parts of the electro-magnetic spectrum—
'.—The Secretary of State may allocate a new part of the spectrum to a licence holder in return for that licence holder relinquishing that part of the spectrum that they have previously been allocated.'.

New clause 4—Secretary of State's power to purchase electro-magnetic spectrum—
'.—The Secretary of State may purchase electro-magnetic spectrum from a licence holder.'.
New clause 5—Selling or trading of electro-magnetic spectrum—
—A licence holder may sell or otherwise trade all or part of the electro-magnetic spectrum which they have been allocated.'.
New clause 6—Reallocation of electro-magnetic spectrum from broadcasters—
'.—The Secretary of State may reallocate any part of the electro-magnetic spectrum from television or radio broadcasting licence holders to other users if he considers it expedient to do so, or if he considers it will promote the change-over to new technologies, or both.'.
New clause 9—Requirement on broadcasters to use electro-magnetic spectrum efficiently—
'.—The Secretary of State shall require holders of broadcasting licences to use the electro-magnetic spectrum efficiently, and may reallocate any part of the spectrum made available as a consequence of such efficient use for other purposes.'.
New clause 11—Promotion of free market in the use of the electro-magnetic spectrum—
'. Having regard to the desirability of promoting a free market in the use of the electro-magnetic spectrum, the Secretary of State may re-allocate spectrum from existing licence holders to new entrants to the market.'.
New clause 12—Reallocation of spectrum within particular wavelengths—
'. The Secretary of State may re-allocate electro-magnetic spectrum within particular wavelengths to ensure competition in services which require a specific electro-magnetic wavelength.'.
New clause 15—Low power transmitters—
'. The Secretary of State may by regulations provide that low power transmitting devices which do not cause interference to other users do not require a licence.'.
New clause 19—Unauthorised use of spectrum or breach of licence conditions
'.—The Secretary of State may by regulations prescribe the actions to be taken against those who use the electro-magnetic spectrum without authorisation, or who operate in breach of licence conditions.'.
New clause 20—Transfer of services from electro-magnetic spectrum—
'.—The Secretary of State may, by regulations, make provision to encourage the transfer of certain services from the electro-magnetic spectrum to other delivery systems.'.

Mr. Boswell: I suppose that it would be possible for somebody looking at this rather long list of new clauses to conclude that, in the words of a popular newspaper's motto, all human life is there. The group is comprehensive. It has a lot to say, but then it concerns some of the Bill's central objectives and issues. Basically, we are addressing the power to reallocate parts of the spectrum. We are seeking to put a bit of zip and life into the issue of reallocation by proposing alternative approaches.
I come to these matters comparatively freshly. There has been so little going on recently that I am only too happy to participate. After the National Minimum Wage Bill and those small considerations, I have been most struck by the relative conservatism—I hope that I will not put off Ministers when I say that they have been guilty of that—of the Government's rather static attitude to existing


users of the spectrum. They find themselves in the position of somebody drawing up a structure plan for a county, where land is either subject to development or it is not. If it is not, it stays as it is. Indeed, it is proposed that only the additional parts of the spectrum will be reallocated.
In the new clauses, we are giving the Government a series of alternative perspectives and options. I hope that they will consider them seriously. It is certainly within the experience and comment of many persons in the field, as well as business users and those who are technical or academic, that some options should become available for reallocation of the spectrum.
I shall pick out three comments. First, as has been discussed, there is congestion in certain areas of the spectrum. There is, therefore, a need to do something about that, although not universally to the same extent. Secondly, there is a growing technical efficiency in compression of signal use; one can do things that would not physically have been possible a few years ago. Thirdly, there will be a changing pattern of use. It is not for us to debate—certainly not in public session—whether the Ministry of Defence requires all its spectrum, and whether it makes best use of it. I certainly would not claim to be a practitioner or be able to speak with authority on that. Those who are—I do not think that they are shooting a line—express some concern.

Mr. Ian Taylor: I am listening carefully to my hon. Friend. He might find that there is a fourth point: where technology enables new use of existing spectrum, which therefore requires reconsideration of the allocation.

Mr. Boswell: I suspect that my hon. Friend has in mind—although I may be wrong—the transition from analogue to digital signals. I notice him nodding. He has added a valuable point.
It is all very well to validate existing licences. There were some exchanges in Committee on this matter, and I understand the Government's argument that they do not want to destabilise people who have to invest quite a lot without giving them some assurance of reasonable security of tenure. It does not seem right that a licence should constitute what might be termed a life tenancy of a bit of the spectrum, regardless of how well it has been used or of whether it can be used more efficiently or moved elsewhere.
That is a difficult balance to strike. Given that there is congestion in some areas, we have come across a very valuable resource that is available naturally through the operation of the spectrum and the electromagnetic waves. We must use the whole of it to best effect. It may not be such a good idea to rely simply on incremental changes when additional parts of the spectrum become due.
I shall rehearse the new clauses in this group—although, as they are clear, they speak for themselves. New clause 2 gives the Secretary of State the power to reallocate any part of the electromagnetic spectrum that he considers is not used efficiently. That is a rather generous power—as the Minister knows, we are extremely generous with our offers to Ministers when we think that is appropriate. In this case, we are offering Ministers a significant power of reallocation.
11.30 pm
The House will not be surprised to learn that the other new clauses are slightly more qualifying. They are designed to stimulate debate and discover which bits tickle the Government's fancy—metaphorically speaking—and about which they might be disposed to provide some assurances. New clause 3 states:
The Secretary of State may allocate a new part of the spectrum to a licence holder"—
which is consistent with the broad approach of the Bill—
in return for that licence holder relinquishing that part of the spectrum that they have previously been allocated.
That is an attempt to produce a better grouping or a more efficient use of the total spectrum. It offers a power to swap between one user and another.
New clause 4 gives the Secretary of State the power to buy back spectrum from a licence holder. At this point, I remind the House—because I failed to mention it a moment ago—that all licences are not absolute and as of right, in the sense that they could be revoked tomorrow. I think that that would be an unreasonable act—to use the lawyers' term—in the present circumstances. However, it would certainly be much more reasonable if the Secretary of State were given the power to say, "We really want you out of this bit of the spectrum, and we are prepared to pay for you to move"—in the same way that a landlord may reach an agreement with a tenant to move.

Dr. Palmer: I am puzzled by the fact that the new clauses give considerable power to the Secretary of State to act pretty arbitrarily—although the hon. Gentleman said that he thought that that would be unreasonable. There is no reference to any need to provide adequate notice, in contrast with the provisions of an amendment that we shall discuss later. It appears that new clause 6, in particular, would allow the Secretary of State to reallocate the spectrum for quite subjective reasons without compensation or notice. I wonder whether that is what the Opposition intend. If so, it seems to be a rather Marxist policy from the new Conservative party.

Mr. Boswell: I will not say that the hon. Gentleman is beavering away like a terrier, because that would be a mixed metaphor. However, he is working like a terrier in an attempt to create distinctions without difference and difficulties where none exists. The fact is, as will be fairly familiar to the House—I am now at least modestly familiar with Committee work, although I would not like to make too great a claim—Oppositions propose many things to tickle a Government's fancy. It is the groundbait rather than the single fly that is being cast over the Government. The hon. Member for Broxtowe (Dr. Palmer), who served on the Standing Committee, has technical expertise and a real interest in this subject. I hope that he will feel able to contribute to the debate and will respond appropriately to particular points.

Mr. Ian Bruce: rose—

Mr. Boswell: I shall give way to my hon. Friend in a moment, but I was concluding my remarks on the intervention of the hon. Member for Broxtowe. The hon. Gentleman does not have to follow every last word that we have put in our new clauses. If he is producing a corrective measure in the interests of civil liberties or


natural justice—not that I would expect Ministers by definition to behave unreasonably—he would have my support in amending our new clauses.

Mr. Bruce: The argument of the hon. Member for Broxtowe (Dr. Palmer) is valid and I put my hand up to being the person who did the sketchy drafting. I was congratulated on its clear language and the fact that it was not beset by regulation and all the rest. If I had thought for a moment that we could get the Government to do something about that, I would have taken much more care with the new clause. I assure my hon. Friend that I would certainly support the Government if they said that they wanted a little more time, in order to adjourn the House and produce better clauses, to make an even better Bill than the one that we suggest.

Mr. Boswell: I congratulate my hon. Friend on his intervention, because he has killed two birds with one stone. He has managed to provide an explanation for the hon. Member for Broxtowe and to support my argument—that is welcome because of the consensus about the way in which we approach this matter.
I am anxious to get on and not to interrupt the flow of the argument. We are rehearsing the various possibilities that the Minister will have been considering in papers put to her, or on which she might commission papers. It would always be possible to do a number of things—if not in this legislation, then subsequently. It would be difficult to do so in the Bill, because it has already been considered by another place.
New clause 3 would give the power to reallocate by exchange or buying in, and new clause 4 would provide the buying-in power. New clause 5—I am going through the new clauses seriatim for convenience—is radically different because it does not involve the intervention of the Secretary of State, although I suspect that some legislative facility would have to be provided. The new clause provides for a secondary market in the spectrum; that is an attractive and interesting concept. One does not necessarily need to get into the agonising issues of auction which we discussed earlier. However, if one wants to use the market modestly to move spectrum about between a willing buyer and a willing seller, the Secretary of State should not frustrate that.

Mr. Ian Taylor: This new clause is important. It takes us back to the principle of the Bill, which is to promote greater efficiency of use of a scarce resource. One matter that needs further consideration is how that can best be achieved. As long as there are rules against hoarding, the secondary market could be a useful way to promote the very efficiency gain for which we are looking in the sector.

Mr. Boswell: I am grateful for my hon. Friend's support. The Government should think about this matter with the caveat that he rightly introduced, because we do not want people to hoard capacity. Indeed, a straight buying-in or confiscatory power might be necessary in cases of hoarding.
To continue my tour through the new clauses selected—of course, I shall not advert to the others, Mr. Deputy Speaker—I come to new clause 9, which is the more authoritarian version of the reallocation point.

New clause 11 concerns the promotion of the free market and is based on the Bill's principle, as my hon. Friend the Member for Esher and Walton (Mr. Taylor) rightly said. It proposes an administrative, rather than a market solution—reallocation by the Secretary of State.
New clause 12 raises an interesting consideration, as it relates to whether particular wavelengths are appropriate for particular services. I am advised that some wavelengths require a specific electromagnetic wavelength, whereas others are much more flexible, so to speak. As we want the spectrum to be used to best effect, it would be sensible to be able to reallocate. We do not specify how that should be done, but we do specify that the aim should be
to ensure competition in services which require a specific…wavelength".
I have a feeling that my hon. Friends who have expertise in this matter will want to speak further on that matter.
New clause 15 represents an interesting deregulatory concept—or, to use the Government's current terminology, a better regulatory concept. If low-power transmitters are not likely, or in any way disposed, to upset other users, why are they required to have a licence at all? I do not know whether specific exceptions exist, but the Government should consider whether some would be appropriate.
New clause 19—I have almost reached the end of my list—would provide for a power to police those who pinch a bit of spectrum without authorisation, or those who have a bit of spectrum but operate in breach of the licence conditions for that spectrum. That may be rather authoritarian, in that it could lead to punishments, one of which could be the withdrawal of the spectrum that was abused—of course, if access had not been authorised, it could not be withdrawn, in which case other punishments would be appropriate.
The new clause begins to address how we should deal with people who intrude on other people's frequencies. It does not provide for an absolute power, because, even under our rather restrictive drafting, it prescribes the need for regulations, which would be debatable in the House. That would be a safeguard.
New clause 19 is also designed to probe the Government's intentions if there is some market perspective, rather than only an allocation of licences. We want to know whether the Government believe that, where money and value are at stake and people have paid for their piece of the spectrum, there could be better safeguards to ensure that the market worked properly.
New clause 20, the final one in the group, is again somewhat different. It would provide the Secretary of State with a regulatory power to
make provision to encourage the transfer of certain services from the electro-magnetic spectrum to other delivery systems".
We could hardly be less specific or prescriptive about what those delivery systems might be—they could be anything from optical fibres to carrier pigeons. There might be cases in which people could be prevented from using the spectrum, if access is scarce, because they could communicate in other perfectly sensible ways. That would be flexible, rather than prescriptive.
This is a rather extended group of new clauses, but they are different from one another. I readily concede to the hon. Member for Broxtowe that they are not perfectly


drafted; they are designed to raise a series of issues relating to the broad objective which we all share—better use of the spectrum—and to elicit a Government response.
Our concern is that this exercise cannot operate only by the allocation of additional portions of the spectrum, however lucrative or attractive that may be to Government. The Government must consider whether the spectrum is used to best effect—indeed, the advisory group must encourage them to do so. That may be achieved through a more controlled use of market mechanisms, supported, where appropriate, by Government intervention either to take in bits of spectrum that are not properly used or to move the spectrum about. If I were to identify the new clause of the greatest salience, new clause 5, which establishes the principle of a secondary market is perhaps the most productive for the future. Given what is now a welcome acceptance of the market economy by the Labour party—we need to see how that works in practice—I hope that the Minister will think long and hard about ways in which she can assure us of her interest. Perhaps we can move towards future legislation that will establish that principle.

Mr. Ian Taylor: This is an important group of new clauses. They go some way towards the probing of the Government that the Opposition should be doing. Increasing the efficiency of use of the radio spectrum has taken a great deal of thought, certainly while the Conservatives were in government. People in industry who advised the previous Government were also exercised about it. How at any given moment does one find the right spectrum for an activity such as mobile telephony, which needs to group around 18 GHz, I believe—I can never remember whether it is MHz or GHz. It was difficult to accommodate all the spectrum that the industry wanted around that level.
Even when I was a Minister, there was a good deal of difficulty in accommodating the four main mobile telephone operators. There had been considerations about how, if one of them was not using the spectrum properly, one might reasonably claw spectrum back, and under what terms. I am glad to say that, to some extent, reasonable negotiation was possible.
The Ministry of Defence is probably now a good deal more reasonable—the Minister will confirm this—about its spectrum and how it might be used for commercial purposes when it is not fully in use by the military. Certainly, that was the case in my day as Minister, but there are some arguments as to what overarching interest the Government have in making sure that the Ministry of Defence uses spectrum with the greatest efficiency, in the interest of the economy as a whole. The MOD's age-old argument that spectrum must have national clear coverage is not necessarily viable, given improved technology and the better focusing of spectrum.
I had a lively discussion with Channel 5 before it went on air. This is confusing terminology, but there is a national area of clear spectrum called channel 35. I believe that it could be one of the first clear national channels available for auction. That is not the subject of this group of new clauses, but it shows that there is potential for moving to auctions when there could be a lot

of users of a particular part of the spectrum. When Channel 5 was going live, in certain parts of the country it wanted to use a digital spectrum suitable for analogue transmission in the early days. It said that up to 4 million households would benefit.
There was a trade-off, which we handled by means of a gentleman's agreement, if the Minister will forgive my using that expression, between Channel 5 and the Government. I urge the Minister to keep a close eye on it. It was agreed that Channel 5 would have the right to use part of the spectrum in certain regions for five years, when it would have to hand it back to the Government, at no cost to the Government. When it connected people to Channel 5, it had to tell those who benefited from that analogue use of channel 35 spectrum that they would have to migrate to another delivery system in five years.
Channel 5 accepted that happily, because it knew that in five years it would have better delivery systems and would probably be moving to a clearer digital signal. The negotiations were complex, because my overarching aim on behalf of the Government was not to lose the advantage of a clear national digital channel, which may be used ultimately for, say, genuinely mobile television. That may not be the most exciting use of it, but it is an interesting use and there are tremendous advantages in having genuinely mobile national television which, because it is a clear signal, would be available across the country, even if one was moving around from area to area.

Mr. Boswell: The prospect of genuinely mobile television is exciting. Does my hon. Friend agree that for our present consideration, one of the great—if not the unique—selling propositions of radio is its extreme mobility, which is why it is so attractive and why its spectrum allocation is so important?

Mr. Taylor: I entirely agree. My hon. Friend and I agree on the principle of the Bill, and he is right to table the new clauses, because there are ways of improving the Bill before it is too late. The management of the spectrum will have to develop fairly quickly, and the more powers that are taken at this moment in the Bill, the better it will be. I urge the Minister to consider seriously the new clauses that my hon. Friend has wisely tabled.
As I mentioned in an intervention, there will be cases where, because of the technology, the Government and the Radiocommunications Agency will want to move users off a particular spectrum that is not indispensable to them and which could be used more efficiently by another company and for another purpose. I am sure that the Minister is aware of such cases, and the new clauses would give powers that she would find valuable.
With regard to the move to digital television, I was disappointed that the DTI did not continue to take the lead on the important matters related to digital television, as the Department had done under the previous Government. There seems to be too much interference by the Department for Culture, Media and Sport. I never criticise other Government Departments, of course, but when complicated matters are at stake involving technology and commercial interests, it is important not to let the Department for Culture, Media and Sport have too much say.
In the context of digital television, it should be the DTI's overriding ambition to achieve progress towards switch-off of analogue transmission at the earliest possible


date. I am not being silly and suggesting that that means denying many people the ability to receive television. We all understand that. A similar problem emerged with the move from black and white to colour television.
The point is extremely serious. There would be huge commercial advantages for the United Kingdom to be in the lead. If we want to stimulate the move to digital television, a series of timetables must be set. We had set five years or 50 per cent. coverage of digital, whichever was the lesser. Those aims seem to have been fudged in recent Government statements. That will give the wrong impression to industry, which will have to make huge investments if the digital revolution is to occur.

Mr. Boswell: I am grateful to my hon. Friend for giving way, and I am anxious not to interrupt his flow. Does he agree that the experience of radio shows that one critical element is the cost of the receiver? That bears on the acceptability of the switch from analogue systems to digital. Does my hon. Friend further agree that one approach that can fruitfully be adopted, and has been adopted by the Radio Authority, is to allocate licences over a longer period, to give operators a greater inducement to make the shift?

Mr. Taylor: Yes, I accept that. We shall need a series of innovative methods to encourage investment, and longer licences is one. The prize of getting digital transmission for television is not just the fact that we may well become the world's largest set manufacturer—we do not do too badly at the moment, surprisingly.
There are 42 million television sets in this country, if my recollection of DTI figures is right. The Minister is up to date, and the figure might be slightly higher now. If there are 42 million television sets, that is an awful lot to replace. My hon. Friend the Member for Daventry (Mr. Boswell) raised the cost of not only the set, but the set-top box which, at the moment, would be separate but ultimately would be integrated into the new set as the market developed. As the market starts to expand, there will be a downward pressure on prices.
An innovative idea was discussed under the previous Administration. I would not say that it was Government policy; that would be arrogance on my part, and others would point out that I had not achieved any consensus. However, there was a clear possibility that moneys raised from administrative pricing—or, more particularly, from auctions—could have been put to use to stimulate the market for manufacture, distribution and installation of set-top boxes, so that the price to the consumer in the early days would not be as high as it otherwise might have been.
That could have been done in two ways. The first—this is not the way I favoured—was a straight subsidy in conjunction with the television companies that would be players in the digital age, so that the burden was shared between the Government and the private sector, in recognition that there were Government advantages. The second was that the freeing up of the spectrum when the digital signal was able to pass cleanly—rather than with the distortions that occur when an analogue signal passes from transmitter to transmitter—would make the spectrum valuable. A high price could be put on the spectrum, so that an incomer—knowing that spectrum was available—would pay a certain price. That money could be deployed

to stimulate the freeing up of the spectrum that the incoming investor wished to take advantage of. A pool of money could be put to good use, to stimulate the market and to get it to a critical mass.
Both sides of the House agree that, invisible though it is, the spectrum is one of our most valuable resources, and the ability to make proper use of it is one of the determining factors as to whether the economy is capable of competing efficiently in the future. We need the ability not only to make use of the given current range of spectrum, but to make better use of the very high frequencies which at the moment have not attracted a great deal of investment. The range of 40 GHz would possibly open up the prospect of interactive television channels, and some experiments are going on. Frequencies at the higher end are not at present in great demand, but I suspect that that will change. That means that the Bill will be important, in how we manage and price the system. There are no such powers, but the Bill starts to provide them. In providing those powers, would it not be better to have the extra resources that would be available because of the new clauses?
There are more negative aspects. What powers can we have to take spectrum away from companies—or public authorities—that are hoarding? How do we insist that a company that is not absolutely dependent on a narrow part of the spectrum—and is therefore making inefficient use of that spectrum, looked at in the widest context—is moved to a different spectrum? We may need certain powers because of interference across borders. Obviously, in our case we mostly have a sea border, but that does not stop radio waves and we get interference from northern France and Holland, and vice versa. There may well be occasions—perhaps if we were moving to a new agreement in the European Union on spectrum resource management—when we would need to move companies around. We would need the powers to do that, and we need to find the right pricing mechanism.

Mr. Boswell: I shall share an anecdote with my hon. Friend. I am sure that he is aware of the situation in which somebody's garage door opener in Canterbury might, allegedly, close down all the taxi radios in Calais.

12 midnight

Mr. Taylor: I am sure that The Sun would approve of that anecdote, but I am not sure that it is sensible in any other way. I must not get confused into worrying about European issues, or I shall be thought to be speaking in a different debate.
These powers will be important. There will be many other incidents that I have not mentioned, or which we have not even thought of, because the changes in technology have not yet occurred. I urge the Minister to look carefully at our rather generous offer. It is rare for a Conservative Opposition, fiercely keen as we are to look at the details of Bills, to come forward suddenly, in a fit of generosity at midnight, with new clauses that offer the Government more power. It would be churlish of her not to look at these offers seriously.

Mr. Ian Bruce: My hon. Friend has left out a most important point: the Minister, who is reasonably new to


her job, has the advantage of my hon. Friend's experience. He did the same job for some time. I am sure that she will agree how valuable his experience is.

Mr. Deputy Speaker: Order. That may be the case, but it has nothing to do with the new clause before us.

Mr. Taylor: I heard my hon. Friend's intervention, but I shall not comment on it.
I hope that the Minister will say what her attitude is, as Britain has a tremendous opportunity to show leadership in the effective management of a resource where not only has British industry been successful, but Britain has been successful in attracting inward investment. The proof of that is in the list of members of the advisory committee, which includes Motorola.
Motorola is an interesting company. Not only does it employ thousands of people in this country, but, as an American company, it is an inward investor. I hope that David Brown, Motorola's chairman in the UK, has the appreciation of the main board of Motorola in the United States, as Motorola in the UK is a leading player in developing digital mobile telephony—GSM—and did it almost under the noses, but without the attention, of the American company.
The one country in the world where GSM is not the universal standard is the United States. The American directors of Motorola often look quite uncomfortable when I remind them of the fact that it is thanks to Motorola in the United Kingdom that we lead the world in the spread of GSM. The United States, which is a fairly backward technological market, is looking to catch up one day.

Mr. Oliver Letwin: I should declare an interest, although, having discussed it with Sir Gordon Downey's office, I am not clear whether it really is an interest. However, for the avoidance of doubt, I declare that I am a director of the bank that has been appointed by the Department of Trade and Industry to advise on spectrum bids.
It is important to understand the background against which the new clauses are set, which has become more evident in many ways in other countries. Over the past 10 years or so, I have spent a large proportion of my time setting up the regulatory regimes for telecommunications in other countries. It is important to understand that even if the Government do not accept the intention behind the Opposition new clauses in the precise form in which we have put it forward, they will have to revisit the idea at a reasonably early date—unless they wish to generate some bizarre results.
The first piece of background that is critical—the Minister and her colleagues and advisers, including the impressive list of members of the advisory board that she read out, will already be aware of it—is the fact that compression, which my hon. Friend the Member for Daventry (Mr. Boswell) mentioned, is not a matter of slow progress in a mature industry, analogous with the gradual expansion in the size of aeroplanes, which enables the slots at Heathrow to be used more efficiently over time. Perhaps incrementally over 10 or 15 years we might see a doubling in the size of aeroplanes.
We are talking of an industry in which huge shifts have occurred, not least the effective demolition of satellite as the major means of international voice telephony.

Mr. Deputy Speaker: Order. I have heard the hon. Gentleman talk before about the history of why amendments were tabled. Let us simply say that the amendments and new clauses have been accepted for debate. We do not need a history or a background to them. We need only speak to the business before us; perhaps the hon. Gentleman will do that. I do not want to hear the history of why the amendments are before us. They are relevant, and they are now up for debate.

Mr. Letwin: Of course I take your guidance, Mr. Deputy Speaker, but I am offering not an explanation of why the amendments arose but an argument about why they should be accepted, which I believe is directly germane to the new clauses.
We are dealing with an industry in which compression moves extraordinarily speedily. As a result, what is imagined today—even, perhaps, by the greatest experts—about the amount of frequency, the band width, that will be used may be wholly fallacious two or three years, let alone 10 or 15 years, hence.
Indeed, there is a long history of false prediction about the crowding of use of spectrum, comparable to the long history of false predictions about population growth. The experts turn out to be no better than the rest of us at guessing about such things. The intent behind the new clauses is precisely to allow for the possibility of a huge mismatch between current occupation of the spectrum and what will turn out, perhaps even during the Minister's occupation of her post, to be efficient occupation of the spectrum.
Of course, we all hope that the hon. Lady will progress to the dizzy heights of the Cabinet, but if she remains in the DTI and retains responsibility for the sector, she may find that, even during the lifetime of the present Government, current predictions, including those made by experts in the Department, will have been falsified by technological advance.
The new clauses seek to establish an arrangement under which that would not give rise to either of two developments, both of which must be wholly antipathetic to the Minister's desires. One, which has already been much discussed tonight, is inefficient use of spectrum.
I shall illustrate how extreme such inefficiency can become. Only about 10 years ago, the Government of a not very advanced country, Fiji, thought that it would be appropriate to allocate the entire 900 MHz band—that is, the entire part of the spectrum currently occupied by GSM in the United Kingdom—to one company serving Fiji, whose population is far smaller than that of a small British city. That happened because, on the best advice then available, that Government misunderstood what would be necessary.
That could well occur in a different form in this country. It is a grossly inefficient use of a scarce resource, because other companies could use that but cannot. Secondly—a point that I think will matter to the Minister, as it does to Conservative Members—the deficiencies to which the Labour party has frequently alluded in recent weeks—that rail and water privatisation have generated


some unanticipated profits—could be brought home to roost on a scale that even the Minister might not yet have contemplated.
To be the owner, when compression has moved faster than anticipated—we must remember that we are talking about a geometric progression; it might be two, four, eight, 16 or 32 times faster than anticipated—of a large array of frequencies, which can at that time be used, but only by someone else who does not have possession of them, when a given company which has bid for them has possession of them, is an immense resource.

Mr. Boswell: Is it my hon. Friend's judgment that, despite the compression that he so eloquently describes and its rapid progress, the demand for these frequencies is probably rising faster still? In other words, in the race between the potential demand for frequencies and the technical compression which effectively makes more frequencies available, unless we use the spectrum to best effect we shall be losing, not gaining, ground.

Mr. Letwin: My hon. Friend makes a fundamental point, and it may be right. It is likely to be right. The difficulty is that none of us has the slightest idea whether it will be right. However, the new clauses establish a regime under which, if it proves to be right, as my hon. Friend and I suspect it will, the surplus profit, which would otherwise accrue to the monopolist, who would be able to exact a ludicrous monopoly rate, out of all proportion to the bid that he might have made or the administrative charge that he might be paying, would instead find himself in circumstances where there would be the possibility of that surplus profit being recouped.
I draw the Minister's attention to the kinds of quantity about which we might, in certain scenarios, be talking. Even public switched voice telephony occupies broadly 2.5 to 3 per cent. of gross domestic profit in the UK today. It is perfectly imaginable that, under certain hypotheses about convergence, about which my hon. Friend the Member for Esher and Walton (Mr. Taylor) spoke a moment ago, and under certain hypotheses about compression and demand, which my hon. Friend the Member for Daventry mentioned, we might be talking about surplus profits equivalent to about 1 per cent. of GDP—about £74 billion a year.
That would knock into a cocked hat the entirety of the surplus profits apparently generated, if one listens to Labour Members, by all the nationalised industries following their privatisations. It would still knock them into a cocked hat if one multiplied them by 10. We are talking about great quantities, a great unknown, and, accordingly, a great need for flexibility.
New clause 5 is the minimum response to that range of possible eventualities. It simply argues for a secondary market; a tradeability. That in no sense eliminates the surplus profit. It allows those who possess frequencies today later to trade out of some of them, presumably at the then market value, and, hence, to realise profit. But at least it solves the first problem of inefficient use. It means that if the proud possessor cannot immediately realise—because, for example, he cannot find the financing—capital expenditure sufficient to make use of the spectrum or the frequencies that he holds, somebody else will be able to do so by buying them.

Mr. Boswell: My hon. Friend will be familiar with the situation in relation to certain agricultural quotas. Does

he agree that it would be possible to include within the mechanism a siphon whereby a proportion of the value, or a proportion of the spectrum itself, was taken off as a necessary part of, and concomitant to, the Secretary of State agreeing to such a transaction?

Mr. Letwin: My hon. Friend's mind is so speedy in its operation that he anticipates not merely the next part of my remarks, but the part after that. The solution he envisages is one which the Minister, on mature reflection, may wish to adopt. As I said, new clause 5 represents the minimum position.
12.15 am
By contrast, new clause 11 represents the opposite extreme. It allows reallocation, effectively by arbitrary fiat. The hon. Member for Broxtowe (Dr. Palmer) made the valid observation that serious issues arise from such reallocation—for example, property rights and the rights of individuals and companies that have invested. Nevertheless, the new clause would resolve the monopoly rental surplus profit problem.
The new clause would allow reallocation without compensation. That could be defended on the ground that in order to exercise that power reasonably, so that it would not be challenged in the courts through judicial review, the Minister would have to allow the retention of such parts of frequencies that were originally allocated as was necessary to continue those same actions which were originally the subject of the bid or the administrative charge.
Even then, dangers are attached to that option. However, it would represent a conscious policy by the state to recoup unused frequencies for the public good and to restore profitability—a normal return—to the level that the bidder had anticipated it would be, post the technological changes that had enabled the bidder, hypothetically, to be able to conduct exactly the business he had intended with a much smaller range of frequencies.
There are two poles. At the one pole, there is the entirely voluntary market mechanism, posing no problems of civil or property rights and solving the problem of the efficient use of the spectrum—but leaving intact what might be enormous surplus profits under certain scenarios; a vastly over-adequate reward for the original risk.
At the other pole, there is a more draconian possibility. If exercised in the true traditions of British administration, and subject to the strictures of the British legal system, it would probably result in the preservation of property rights, although it runs some risk of going too far in that respect. However, it would deprive the original holder of what might otherwise be a very excessive profit.
Between those two poles lies exactly the suggestion on which my hon. Friend the Member for Daventry, with his lightning wit, alighted. On mature reflection, we may feel that we are suffering from a lack of completeness in our range of amendments and new clauses. As my hon. Friend said, what we are putting forward tonight is a menu for ministerial consideration, but I fear that it contains only the first and last courses, and may be missing the main course.
We might have tabled a new clause that would have allowed for tradeability, but tradeability with some form of levy—which could be adjusted not necessarily merely


for a normal return, but for a super-normal return to allow for original risk. That might also recoup vast sums for the Exchequer at a time when technology had moved in a way that was not anticipated.
On the issue of immediate practice, we have to consider what will be the effect of the Bill if it is passed as it stands, which I fear may well be the case. In a perfect world, it would not matter if the new clauses were not accepted, because the Government could introduce a new Bill next week with an equivalent set of provisions; but we are all aware that that is not the reality of public administration. No doubt the Minister fought long and hard to find legislative space for the Bill. The dizzying speed with which her colleagues are introducing legislation—much of which I regret—suggests that the legislative timetable may be chock-a-block for many years.
I fear that, although the House is at the disposal of the Government—I sometimes feel that it is utterly so—technology, reality and commerce are not. The speed with which the developments that I mentioned have occurred may mean that the Government cannot catch up in their legislative timetable with the pace of technological development.

Mr. Ian Taylor: I would go even further. Because of the speed of change—my hon. Friend rightly mentioned the advances in compression technology—it is impossible for Governments to anticipate developments in the very near future. All legislation should be technology neutral, and it should facilitate, rather than regulating a closely defined area of activity at any given moment, because that is always likely to block investment or to be simply irrelevant, because the technology has superseded it.
The new clauses are designed to make the Bill technology neutral, creating powers to deal with the technology however it develops. I am interested in the lucid and erudite way in which my hon. Friend is explaining the problem.

Mr. Letwin: It is precisely because of our collective ignorance—and, alas, the ignorance of any Government—that technological neutrality, and flexibility in the face of changing technology, are of the essence. If the new clauses are not accepted, it may be too long before the Minister gets the chance to introduce equivalent provisions.
If the worst happened, and the problems that I mentioned arose, it would be at the cost of some years of efficiency, perhaps to the considerable disadvantage of the economy and with long-term effects on British manufacturing and design, and the problems that the hon. Member for Broxtowe referred to might become acute.
If a company purchased a wide range of frequencies and found that it did not need them all because of advances in technology, but then began to exploit some others in an unanticipated way, it would of course have established a valuable property right in those parts that it had not originally anticipated using for that purpose, and it would be extraordinarily difficult, at least at the far end of the spectrum, for the state ever to recapture the gain.
The Minister may find herself in the bizarre position of having the Conservative Opposition accusing her at a later date of having failed to recapture for the state, in a

virtually unattended House at 12.23 am, an amount vastly greater than the entire surplus profits to which Labour Members allude in relation to privatisation.

Mr. Lansley: I always hesitate to intervene on my hon. Friend, because the completeness with which he forms his argument leads me to suspect that I will simply anticipate a point to which he was about to come.
Does my hon. Friend recall a point made by the hon. Member for Broxtowe (Dr. Palmer) on Second Reading, that if administrative pricing gets the fee wrong, either it will be too high, and act as a disincentive to investment, or it will be too low, and not affect economic behaviour at all? Does my hon. Friend agree that new clause 5—to which, inter alia, he is speaking—would assist, even where administrative pricing applies, in getting the fee right at the earliest possible moment?

Mr. Letwin: My hon. Friend makes an important point. The combination of new clause 5 with new clause 16, which we shall discuss in due course, will have that effect. I must not intrude on your good will by talking about new clause 16 now, Mr. Deputy Speaker, but perhaps we should return to my hon. Friend's point—which is very just—when we debate that new clause. The problem is not merely one of inefficiency or surplus profit. There is another dimension, which makes the flexibility that would be conferred by the new clauses—or, at least, by similar provisions—all the more necessary.
If, on her return to the Department, the Minister consults widely, not just with those concerned with frequency allocation but with those with experience of the entire range of the telecommunications business and, indeed, the media business, she will hear an echo of what I am saying. We may be on the verge of a revolution in the cost structure of the telecommunications industry, to which the new clauses are directly relevant.
There is beginning to be some indication—in Italy, for example—that the fundamental cost of mobile telephony is between a quarter and a fifth of the cost of fixed telephony. That applies even under the fairly efficient arrangements currently operating in the United Kingdom. If the comparison proves to be bona fide—many of us are currently studying the matter in some detail—the entire fixed-line network, not just that of BT but those of its competitors, may well disappear within the lifetime of this Government. That is not because the network's functions will disappear, but because they will be replaced by fixed-radio access.
It is possible that, if the new clauses were accepted, the process could occur smoothly, and that as much as 1 per cent. of gross domestic product could be added to consumer surplus in the economy. As I have said, voice telephony accounts for between 2.5 and 3 per cent. of GDP. If we reduce its resource cost by more than 50 per cent., there may be a consumer surplus of roughly 1 per cent. of GDP. The new clauses would allow the transfer to take place smoothly. Without them, such a transfer might not be possible. The economic loss that might be entailed—I say "might", but I think there is a pretty strong probability—if the Minister fails to adopt similar measures could be very great.
I hope that on all these grounds—sheer efficiency, preventing abnormal profit through an unintended monopoly rent, and, most important of all, the generation


of a huge economic opportunity gain for all of us—the Minister will seriously consider whether, after all, she should opt for flexibility arrangements of this kind.

Mr. Colin Breed: I should like to express the Liberal Democrats' views on the Bill. We are concerned primarily with spectrum reallocation, which is a matter in which we should perhaps be more involved. As the spectrum is a scarce resource, I have some sympathy for the Bill's clauses dealing with reallocation.
Three aspects of spectrum use should be controlled, the first of which is its inefficient use, or non-use. I certainly do not wish spectrum to be acquired for purely investment purposes.
Secondly, spectrum use for new purposes in new technology should be controlled. I imagine that, while this debate is going on, new technologies are not only being invented but are being introduced. Indeed, by the time debate on the Bill eventually finishes, I should not be surprised if those new technologies have become obsolete.
Finally, the way in which spectrum is used by spectrum holders should be controlled, to enable some of it to be released. Such controls might make spectrum reallocation possible, which would help in ensuring good spectrum use. Controls may also make it possible to use spectrum for the policing, safeguarding and security of spectrum holders—who may have paid exceedingly large sums for use of that spectrum. Surely there must be some safeguards for spectrum users. Spectrum reallocation to ensure its proper use would ensure also that the system is secure and is being used most efficiently. However, I do not know how successful the Minister will be in persuading the Ministry of Defence to reallocate spectrum.
12.30 am
I am absolutely opposed to new clause 5, which deals with the secondary spectrum market, because secondary markets are an entirely inappropriate way in which to consider spectrum. Milk and fishing quotas—the spectre of quota hoppers—show how secondary markets develop contrary to all expectations. Moreover, the practice of holding spectrum for investment purposes, and even the auction process itself, may encourage undesirable practices and are not the most efficient way in which to use spectrum. I certainly would not like there to be differentiation between spectrum owners and spectrum users.
We have created a system in which spectrum is acquired in auctions—not so that it will be used properly but so that it might be held for competitive advantage, or even to establish a dominant or monopoly market position, thereby preventing others from using it properly.
Secondary markets in spectrum would be a dangerous development in a very immature market, particularly because we have no real understanding of what will happen in the spectrum market. We have had all sorts of problems with milk and fishing quotas which are attributable essentially to secondary markets. Similar problems may be visited upon us in a secondary spectrum market.
The hon. Member for Esher and Walton (Mr. Taylor) briefly mentioned set-top boxes for televisions, which undoubtedly will soon be introduced. The boxes provide

a good example of the need for care in that market, to ensure that domination is not established by one provider and that proper competition is maintained.

Mr. Ian Taylor: I do not wish to go back over old ground, but the hon. Gentleman mentioned the process of conditional access, which was put in the hands of Oftel to regulate. I think that those rules will provide fair and non-discriminatory access, although the market is currently taking its positions and deciding on one set-top box and compatibility. I believe that Oftel, as the regulator, is the right organisation to consider these very detailed arrangements, and I think that, on balance, we made the right judgment.

Mr. Breed: I bow to the hon. Gentleman's superior knowledge of that. The way in which the dominant operators in that marketplace operate in other fields causes me to fear that the so-called level playing field will not materialise. I hope that Oftel will indeed be able to control and manage that situation, which will have enormous repercussions for us all.
Although I am prepared to support some of the amendments in respect of reallocation, because I believe that they give us some power to ensure that such a scarce resource is used efficiently, I am signalling our complete opposition to new clause 5, as I firmly believe that the creation of a secondary market in such an immature sector is likely to have dire consequences for the Government and for the country.

Mr. Ian Bruce: Although I was the author of most of the amendments in the group that we are debating, I am not the original author. Let me tell the House why we are discussing them, why the Speaker has selected for debate 18 of the 19 that I wrote, and why we did not debate those amendments in Committee, which seems almost an age ago.
During the Bill's passage, we heard from the Minister that she had received advice from the Office of Telecommunications. There was a hint that Oftel was not quite as enthusiastic—or, at least, whole-heartedly enthusiastic—about the Bill as the Government were, and that it felt that the Bill should have gone much further on several issues.
I shall not speak about the whole gamut of utilities, because I did not produce any amendments on that subject. In tabling the amendments, I tried to ask where we had gone wrong in the pricing and efficiency of use of spectrum.
The Government came up with a Bill that was primarily a Conservative Bill—a Bill that was in the hands of the Department of Trade and Industry when the Minister and the Labour party came to power in May. The Bill deals with how the existing spare spectrum will be allocated. It also deals with the reallocation of spectrum that we assume will become available and which we assume will be reallocated, given the current licence criteria. It will become available, and the Government know that it will become available and, in time, by what method it is to be reallocated.
After the Committee, I attended a presentation organised by Pitcom—the Parliamentary Information Technology Committee—of which I have the honour of


being vice-chairman. It seemed to me, from the frank comments made to me by Oftel at what is generally an off-the-record briefing, that there was more to be said about the Bill. The amendments that we have tabled generally reflect what Oftel said about what it wanted to happen.
I shall take advice from my hon. Friend the Member for Esher and Walton (Mr. Taylor), who was Minister for Science and Technology in the previous Government. He has told me that he well acknowledges that other things were wanted when he was Minister, but that, in the time leading up to the general election, for manifesto purposes, the Government felt that they could make only limited recommendations. My hon. Friend has told me that any limitation of agreed Government policy just before the general election, for manifesto purposes, should not be a limitation on the present Minister.
I wrote the amendments in less than an hour, reading Oftel's clear advice to the Radiocommunications Agency and the Government. That is where the amendments spring from. I do not want to attribute any words to Oftel. After our meeting, I asked Oftel to tell me what it felt should happen, and I should like to read from the letter that I received.

Mr. Lansley: My hon. Friend raises an interesting point. Some of the issues raised by Oftel were referred to in Committee, whereas others have come up since. The Standing Committee sat about two weeks after Second Reading, but four months have elapsed since then. The Government have had an opportunity to respond, but have failed to do so. They have not tabled their own new clauses.

Mr. Bruce: That is true. I pay tribute to the Minister. I often complain about not receiving replies to letters, but the Minister is very quick to respond to them. When I received a letter from Oftel, I wrote to tell her about the additional information that was available to us—which was already available to her. She rapidly wrote back, telling me that she had read the information, and that the Government had made their decisions with that advice available and did not intend to move any further forward.
I understand that the Department of Trade and Industry has been very busy with legislation. This week has shown how the Department has become clogged up, not having parliamentary time to bring its Bills back on Report. That backlog of parliamentary business gave the Department time to deal with the issues that Oftel wanted the Government to move further on. If the Government reject the new clauses, they will have to find time in the remaining three or four years of this Parliament to do something about these important issues.
I thought it proper not to interpret what Oftel told me, but to read the relevant paragraphs from Don Cruickshank's letter of 5 December. He says:
When we met on Tuesday at OFTEL's presentation to PITCOM, you asked me to write to you setting out OFTEL's view of the Wireless Telegraphy Bill particularly how the consumer interest should be safeguarded.

Under the heading, "The Bill", the letter says:
OFTEL welcomes the Government's Wireless Telegraphy Bill as part of a process of reviewing the way spectrum is used. Radio makes a very significant and increasing contribution to national economic welfare".
I shall not detain the House with the details of the £13 billion involved and the 410,000 jobs. He continues:
It is vital that methods of spectrum management are updated to meet the increasing demands of new market requirements and to allow increasing competition and the development of innovative services. The RA—
Radio Authority—
review, the White Paper and the current Bill are steps in that process.
That is very important—they are steps in the process.
The letter continues:
In providing for administrative policy and auctions, the Bill paves the way to opening up access to radio spectrum and providing an additional management tool to that of regulation. OFTEL is very keen on the use of auctions as we consider they provide the best process for allocating spectrum to operators in the most economically efficient way. Where spectrum has already been allocated administrative pricing will allow a licence fee to be set which will reflect its economic value and encourage operators to use it efficiently.
The letter goes on:
I attach a copy of Oftel's response to the recent RA consultation on administrative pricing so you can see Oftel's views on these detailed issues.
The Bill is only part of this process of overhauling the previous regime. The RA have indicated that they will go on to look at the possibility of secondary trading of spectrum".
That is very important in the context of the new clauses.
Oftel strongly supports the use of secondary trading"—
which is not in the Bill but is in the new clauses—
which will enable spectrum to be traded between users, encouraging them to use only what they need and to sell the remainder. This will ensure more efficient use and lead to competitive and lower prices for the consumers as the surplus holdings are used by other operators. As we discussed on Tuesday, this will become increasingly important as the fixed and mobile telephony markets merge and more operators want access to radio spectrum.
The RA will, in addition, be seeking to ensure that spectrum is not hoarded by public and private holders to the detriment of others who are seeking to use it for new, innovative services.
Again, that is not in the Bill, but it is in the new clauses.
It is extremely important to keep up pressure here in order to provide spectrum for new operators and services.
I will not read the last paragraph; suffice it to say that it mentions putting consumers first. It is not relevant to the new clauses and I would certainly be out of order to read it. I know that a copy of the letter was sent to the Minister, so she is aware of the point.
With the letter, I received two very important documents. One was the review of utility regulation, which is also not relevant to the new clauses. Our debate could well have lasted for several days if I had gone through that document and drafted amendments that would make the proposed changes to utility regulation, but I shall not stray from the new clauses.

Mr. Lansley: My hon. Friend referred, if I heard him correctly, to Oftel's view that the Radiocommunications Agency will ensure that hoarding does not occur. He rightly says that one of the new clauses specifically addresses that point. The implications of Oftel's letter is that it expects that the Radiocommunications Agency will be able to achieve that. I am not clear from looking at the Bill—unless it is somehow hidden in the enabling power on regulations—how the Radiocommunications Agency will achieve that without benefit of the new clause.

Mr. Bruce: In short, it will not. The point made by Oftel is that the Radiocommunications Agency understands that the issue is important, will do further work on it and will come forward with proposals. One suspects that those proposals will be for further legislation, which the new clauses would short circuit.
There are clever people at the Radiocommunications Agency and even cleverer people in the DTI. Some solution to enable secondary trading may be found and people may be allowed to release the spectrum early, as we seek, without the benefit of the new clauses or new legislation—but I do not see how. If I did, I would not even have spent an hour drafting the new clauses, which are directly derived from a document to which I shall refer. It is very important that the House understands where Oftel is coming from. I have simply used my own thought process to try to introduce points without being out of order. I was quite amazed that Madam Speaker acknowledged that the subject of the new clauses had not been dealt with and that the new clauses were, therefore, in order.
This document is Oftel' s response to the Radiocommunications Agency's proposals for implementing spectrum pricing—which the Minister had in her hands when she was considering how the Bill should be framed. She has now had many months in which to consider the new clauses and I hope that some of them might be accepted—although I spoke to her earlier this evening and she did not give me much hope. The document states:
OFTEL supports the introduction of administrative pricing as a useful step towards more efficient, market based, spectrum management. However, consideration should also be given to increasing the supply of available spectrum".
That is at the heart of what we are trying to do in our new clauses.

Mr. Lansley: My hon. Friend makes a useful point. Given that one does not want to imperil those who have investments in or grandfather rights on existing licences, there will, of necessity, be only a limited amount of spectrum available in the first instance—unless one is able to recover some additional spectrum from some of the users who are relatively over-provided, such as those within Government or broadcasters. Does my hon. Friend agree that there would be some advantage in trying to win a little extra spectrum for allocation into administrative pricing, particularly if it enabled the secondary market to set more accurately appropriate administrative pricing for those who have current fees but who should not be disturbed?

Mr. Bruce: In asking that question, my hon. Friend sets out the case extremely well. By chiming in with this document, we shall see how Oftel suggests that that

should happen. The Bill aims to improve spectrum management, but it deals with only that little bit that is currently available and another lump that is likely to become available—but we do not know for certain when. Analogue television might have to continue if digital television proves to be a complete failure. The two components must work side by side. We need the right tools. The Liberal Democrats and my hon. Friend the Member for West Dorset (Mr. Letwin) have remarked on the speed with which things change. However, I must move on, Mr. Deputy Speaker, and I shall try to limit the number of interventions—and perhaps give way only in order to wet my whistle.

Mr. Letwin: I am grateful to my hon. Friend for giving way. The interchange between him and my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) prompts some very interesting reflections. Does my hon. Friend agree that there could come a time when it will be enormously important to use administrative pricing as a signal to the secondary market, and indeed to the primary bidding market, in order to ensure that optimisation occurs at a lower point on the price curve? For example, if we want to see a wider spread of the use of a particular technology, we might want to ensure that the bidding resulted in a low rather than a high price, with tough conditions on coverage. Administrative pricing might be used to that end.

Mr. Bruce: Indeed it might. Probably the most important issue—to which new clause 5 refers—is allowing people to trade spectrum that they already own. We have seen how that becomes very popular with owners of spectrum, who find that something they are not using terribly efficiently suddenly has enormous value. They can then put their share on the market and make a profit, while releasing the spectrum for other people. If we leave only a tiny amount of spectrum for the new services, the providers will have to pay enormously high prices. If a lot of spectrum were available, the consumer would benefit. I am only halfway through my first paragraph, so I must continue. The document then states:
However, consideration should also be given to increasing the supply of available spectrum, not just curtailing demand by"—

Mr. Deputy Speaker (Mr. Michael Lord): Order. I must remind the hon. Gentleman that although it is permissible to read from documents in the House, it should be done briefly and not at length.

Mr. Bruce: Indeed, Mr. Deputy Speaker. I think that the document is relevant, but I will take your guidance and skip through it. However, it is a pity that one cannot have a document fully put into Hansard, which would have been the most efficient way to do this. I am trying not to misquote Oftel, but I will paraphrase wherever I can to speed up the process. It is important to get the first paragraph down, as it concerns the principle that Oftel is dealing with.
The document continues:
This means addressing the issue of spectrum allocation, to ensure that spectrum which is currently underutilised is made available to those who can use it most efficiently. In practice, this would mean adjusting fees to promote greater efficiency, not only in those areas and for those services where congestion already exists (even though efficiency may already be at a high level) but across all user groups in both public and private sectors.


The next paragraph deals with the allocation of spectrum that had been given historically to both BT and Mercury, which is now known as Cable and Wireless Communications—it may even have changed the name again since the document was produced. A large amount of spectrum has been given to those two large companies and there is no incentive for them to use it efficiently or to migrate out of the spectrum allocated to digital broadcasting or fibre. Oftel certainly wants that facility to be made available.
On analogue broadcasting and related fixed-link services, the licences issued under the Broadcasting Act 1990 have already been subject to a market-based process through competitive bidding. Again, Oftel points out that there is no real incentive for someone buying spectrum for broadcasting to use it efficiently. Effectively, those companies have a licence to broadcast. There are ways in which to use the very same spectrum for other services, but there is nothing to encourage the BBC, Channel 5 or whoever to use it efficiently.
The document continues:
Oftel believes there should be a greater loading of the fees for analogue TV fixed links to reflect the fact that these are susceptible to interference (and therefore sterilise a larger area)".
Often an enormous amount of frequency is taken up by that.

Mr. Jon Owen Jones (Lord Commissioner to the Treasury): Which clause does this relate to?

Mr. Bruce: All the new clauses are relevant and in order. I do not believe that it is the job of the Whip on duty to advise the Deputy Speaker on what is or is not in order. We are speaking to the group of new clauses and I can assure the hon. Gentleman that they are very much in order. The way the system works gives people the tools. I could certainly talk at great length if the hon. Gentleman would like me to. I am attempting to get on and to be as brief as I can. Sedentary interventions from the Whip on duty, who thinks that he is speeding up the process, actually slow it down.
Basically, such a move to digital would be in line with using digital instead of analogue signals wherever possible. Certainly, mobile telephones, instead of having an analogue basis, are now digital. That is a more efficient way in which to use the available spectrum.
The steps taken by the Radiocommunications Agency to recover spectrum allocations that are inconsistent with the market allocation are important. BT currently enjoys 30 per cent. of all the available telecommunications spectrum below 30 GHz—my hon. Friend the Member for West Dorset was right to say gigahertz, not megahertz—and 50 per cent. of the fixed-link spectrum below 38 GHz. The agency points out that a useful element of the spectrum has been allocated to BT. Cable and Wireless Communications was also given the most efficient part of the spectrum for utilisation.

Mr. Lansley: rose—

Mr. Boswell: rose—

Mr. Bruce: This is a complicated point, and I must finish it before I give way to either of my hon. Friends.

New smaller users cannot use that particular lump of the spectrum. The new clauses would allow the Government to say, "We'll take out some of that spectrum so that it can be reallocated to new entrants, but we can give other parts of the spectrum, perhaps in less efficient areas, to BT or Cable and Wireless, which could utilise them because they have a wide range of users."

1 am

Mr. Boswell: I am most grateful to my hon. Friend for giving way. Does he have at the back of his mind the example of airline spots, which is not identical but closely cognate? For example, at Heathrow, British Airways has a preponderant allocation of the total available slots—some people argue that that system should be relaxed.

Mr. Bruce: Yes, it is historically the case that the person who arrives first bags the best area. We are all committed to encouraging competition, and Oftel is saying that competition will work better if the best areas—the Heathrows—are spread more evenly among the many operators rather than the few.

Mr. Lansley: I am grateful to my hon. Friend for giving way. I was hoping to intervene when he was rightly making his point about the switch from analogue to digital. Does he agree that the commercial imperatives that are pushing firms in the mobile telephone sector rapidly from analogue to digital are not reflected in the broadcasting sector? Is it not perverse, therefore, to implement an additional mechanism to push mobile telephones and their operators from analogue to digital when the Government do not seem to want to use the mechanism of pricing spectrum to push broadcasters from analogue to digital?

Mr. Bruce: That is a problem which all Governments face. We have heard about the influence of the Department of heritage, or whatever it is now called—we used to call it the Ministry of fun.

Mr. Boswell: The Department for Culture, Media and Sport.

Mr. Bruce: I thank my hon. Friend—it is good to have a prompt available.
The idea behind making people bid for a broadcasting licence was to ensure that they acted efficiently, but broadcasters are given a massive allocation of the spectrum, which could be available for other uses. The public and the Department for Culture, Media and Sport say that we must ensure that people can continue to use their analogue television sets for 20-odd years. I understand that, as Members of Parliament, we shall all receive letters when pressure is put on broadcasters to give up their spectrum.
The new clauses would provide for a pricing mechanism that could make the broadcaster say, "If we can get rid of the analogue as quickly as possible, we can make millions by transferring it to another operator." They might then spend those millions of pounds on subsidising set-top boxes for their consumers, for example. We should allow the market to help them to do what they want, and the consumer—who is barely mentioned in the Bill—to afford the new technology.

Mr. Ian Taylor: My hon. Friend makes a point that I made earlier, but I intervene to say that I think—I am sure


that the Minister will leap to the Dispatch Box to confirm whether I am right—that the Government have announced the date on which the analogue spectrum for mobile telephony will be switched off; it will be some time after 2000. I wish that such a pugnacious approach had been applied to digital television as well.

Mr. Bruce: I see that the Minister does not want to intervene, but I am sure that, if she knows the date, she will want to tell us it when she winds up the debate.
In the previous Parliament, I introduced a private Member's Bill on telecommunications fraud. At the time, the Bill was intended to help combat fraud on analogue telephones. As promoter of that Bill, I thought it essential to switch from analogue to digital because people who wanted to hack into an analogue telephone would hack into mine as we might upset their nice little business.
I was talking about the exclusive and special arrangements that BT and Cable and Wireless, the two operators within the duopoly, had. No other operator has exclusive rights to that spectrum. Clearly, that is not compatible with the competitive multi-operator environment that now exists. Our new clauses allow the Minister to take that issue on board and to deal with it.
BT and Cable and Wireless also have access to spectrum for other services, especially fixed access and carrier markets. They have almost a monopoly there. They do not even want to switch their own services into those areas of the spectrum. Those services could be more efficiently run there. We are trying to say, "Look BT, you have got all of this." If it can sit on it and not worry, and is not even given an incentive to do anything about it, we shall not get the sort of spectrum management that the Minister has introduced in the Bill.
On the national channels for fixed links, the consultation document issued by the Radiocommunications Agency states:
It is not possible to allocate national channels to new operators other than in the 38 GHz band, which is limited to short range links of up to 6 km. The reason for this is that most of the available spectrum is already allocated on a national exclusive basis to either BT or Cable and Wireless.
That is the important issue. Spectrum should be available to other players. We should be able to open up this part of the market. Without our new clauses, there will be a continuing imbalance in a free market.
We hope that regulation will decrease in the future as the free market exists. The strange thing is that often, to get a free market, one has to introduce a lot regulations at the beginning to build up a framework within which people can compete.
Oftel talks about Government use of spectrum. It encourages the Government to free up their own spectrum and to use it to advantage. It is possible that the incentive for the Chancellor to get out and free up the spectrum—to go to the MOD and all sorts of people—could be in the Bill. Our new clauses provide more flexibility to allow that to happen.
Oftel certainly welcomed the suggested review of the licensing procedure and the increased transparency. We talked in the debate on an earlier set of amendments about helping that process on. Oftel questions whether those services for which simple pre-packaged licences were proposed should be licensed at all. I shall not go into that paragraph of Oftel's response to the consultation

document. It is very useful, but it is not directly germane to the new clauses. It is a good point to say that the less regulation that we have on things that do not require licences the better. That allows short-range spectrum not to be completely controlled. We can just let people get on with it.
On the pricing principles, Oftel
supports a competition based approach to diversity in the market. If prices are correctly set to reflect the supply of and demand for scarce spectrum, it may be that large differentials between different operators' charges result, depending upon the attractiveness of the spectrum concerned.
We discussed in Committee how the Government would deal with those issues, but there is no mechanism within the Bill to ensure that the Government, Oftel and the Radiocommunications Agency can deal with those sort of pricing principles. That is what is contained in our new clauses.
In the absence of efficient prices determined by trading and auctions, it is important that administratively set prices approximate as closely as possible to those that would emerge from a freely operating market. The new clauses deal directly with that.
I shall not deal with paragraph 13 of the document, which I did not understand when I read it so it did not give rise to any new clauses.
In paragraph 14, Oftel states that the methodology for setting administrative prices should take account of alternative uses for the spectrum in question, rather than just the cost of a hypothetical alternative technology for a given use. That will not necessarily produce the most accurate and sensible way to use spectrum.
That approach might have an impact on prices for mobile and personal communications network use, and might allow prices to take account of the different propagation characteristics of different mobile frequency bands. A band of mobile telephony could be put up for auction, and that would create a particular price. The Minister may later allocate other spectrum for mobile telephony. If the previous band was worth £10 million, it might be assumed that the next band was worth the same amount. However, even if the two band widths were the same, they may not be equally efficient for delivering the service, and the pricing should reflect that. Our new clauses would help the Radiocommunications Agency with a more sensible and sensitive approach to pricing.
The next paragraph of Oftel's response deals with enforcement, which does not link directly to the new clauses. I simply mention it so that no one will think that I am trying to hide something that we should discuss.
I have gone through a complex set of amendments as speedily as I could. As we are modernising the procedures of the House, we should have a procedure that allows us to read the full document into the record. That would have saved time, and would have saved the Deputy Chief Whip from yet another visit to the Chamber. It is good to see him so cheerful at this time of night. I am sure that he is extremely interested in the subject, and that is why he is here.
I urge the Minister to accept some, all or at least one, of the new clauses, which would help the Government to manage the spectrum as they wish to do.

Mrs. Roche: I shall take the new clauses in the spirit in which I hope they were intended—as probing new clauses. I must disappoint the hon. Member for Daventry (Mr. Boswell) as I cannot accept any of them, but I shall try to explain why they are unnecessary.
First, the Secretary of State can already do all that the Opposition seek to empower her to do. Secondly, we believe that the powers in the Bill will bring about efficient spectrum use more effectively than regulatory intervention by the Radiocommunications Agency, which some of the new clauses seek, although of course the agency has an extremely important role to play.
With reference to new clause 2, the Secretary of State, acting through the Radiocommunications Agency, already has inherent power to allocate the various parts of the electromagnetic spectrum to a particular service, as she thinks fit. The power is subject only to certain constraints. The new clause is therefore unnecessary.

Mr. Letwin: Will the Minister give way?

Mrs. Roche: No, I shall not. The hon. Gentleman took a considerable time and I want to develop my argument because there are common points about the new clauses that I should like to make.
The Secretary of State possesses all the legal means necessary to reallocate the spectrum between services and to assign licences to individual licensees. There is confusion among Opposition Members. On a close reading of the new clauses, one sees confusion between assignment and the allocation of spectrum.
I fully share the concern of the hon. Members who have tabled new clauses that the spectrum should be used efficiently, but as I explained in Committee and on Second Reading, that is precisely what the Bill is all about. The powers in the Bill enable the Secretary of State to charge for licences on the basis of the economic value of the spectrum. That will permit the Radiocommunications Agency to reassign spectrum to other users.

Mr. Lansley: Will the Minister give way?

Mrs. Roche: No.
While I am not unsympathetic to the spirit of the new clause, I believe that it is unnecessary. I therefore invite the hon. Member for Daventry to withdraw it.

Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. The whole House knows that this business has been put on by the business managers—the Whips in charge of the Bill—and it seems extraordinary to my hon. Friends that the Minister, who always responds fully and takes interventions, should not be doing that on orders from the Whips.

Mr. Deputy Speaker: That is not a point of order. It is for hon. Members to decide whether they take interventions.

Mrs. Roche: Thank you, Mr. Deputy Speaker.
I accept that there may be circumstances in which it would be desirable, for spectrum management reasons, for a particular service to be moved to a different part of the spectrum. There has been a great deal of discussion about this. For example, existing users of part of the spectrum may need to be moved to provide spectrum for a new scheme. Users may also need to be moved to comply with an international agreement allocating spectrum for a new service. That is well known. However, section 1(4) of the Wireless Telegraphy Act 1949 provides the necessary power to revoke or vary a licence if this cannot be achieved through agreement. There is therefore no need for an express statutory power to permit this kind of exercise.

Mr. Lansley: I am grateful to the Minister, who allows me to make a point I fear I may not otherwise get a chance to make. I take her point about hoarding, which we have discussed previously. The industry has clearly not been satisfied by what was said in Committee. I note from The Guardian of 5 February that the managing director of One2One said that he was concerned that some investors would buy spectrum purely to sell it on to other telecommunications companies when they were hit by capacity constraints. The Minister has not assuaged industry concerns entirely. Will that weigh in the balance in terms of adopting at least one of the new clauses on offer?

Mrs. Roche: The hon. Gentleman knows that we have consulted industry all the way through the Bill. From the consultation, we know that, broadly speaking, industry is supportive of what is proposed.
New clauses 4 and 5 raise important issues of the secondary trading of spectrum rights. I shall go as far as to say—at nearly 1.20 am—that I see attractions in what hon. Members have said about new clauses 4 and 5. I certainly agree that secondary trading has the potential to offer considerable advantages in terms of making spectrum management more flexible and allowing market forces a greater role in the process. However, at the moment, I cannot advise the House to accept the new clauses, for five main reasons.
First, despite the advantages of secondary trading, the free market in this area cannot be left to work completely unregulated. Indeed, on Second Reading, and again tonight, the hon. Member for South-East Cornwall (Mr. Breed) made that very point.
Secondly, a compulsory registration system is necessary so that if radio interference is caused, the Radiocommunications Agency will know who is responsible for using a particular assignment. Conditions must be imposed on the use to which the spectrum is put, to comply with international obligations.

Mr. Boswell: indicated assent.

Mrs. Roche: The hon. Member for Daventry is nodding.
The new clauses fail to address these issues, so they are fatally flawed.
Thirdly—this is probably one of the most important areas—at present, no legal property right subsists in the radio spectrum. Licences issued under the Wireless Telegraphy Act 1949 are permissions to use radio


equipment. They do not confer a legal property right. I understand the serious issues that Opposition Members have raised on that point and realise that this sounds a bit harsh but, as drafted, the new clauses are legally meaningless.
Fourthly, if secondary trading were introduced at the same time as we started to phase in spectrum pricing, there would be a grave risk of windfall gains and a disorderly market. The hon. Member for South Dorset (Mr. Bruce) alluded to that on Second Reading.

Mr. Ian Bruce: Will the Minister give way?

Mrs. Roche: Just on that point, as I mentioned the hon. Gentleman.

Mr. Bruce: I appreciate that the new clauses that I have drafted are thin on technical detail. We all understand that windfalls would occur, but surely if the hon. Lady believes in secondary trading she should table new clauses that claw back the windfall or redistribute the money to the benefit of consumers.

Mrs. Roche: As the hon. Gentleman will know, we are breaking new ground in this area, and we are anxious to get it right.
There was much discussion—rightly—in Committee on examples throughout the world, particularly where auctions had been used. We are anxious to learn, but it is important that we do not to rush into this. The hon. Gentleman might be interested in a couple of things that I have to say.
There are considerable legal doubts about whether the proposed system of secondary trading would be consistent with the licensing directive. Overall, it would take much more extensive legislation than the two new clauses to introduce tradeable spectrum property rights.
The hon. Member for South Dorset invited me to respond with some new clauses. I shall give him an example of what that would mean. In New Zealand, it took about 100 clauses, which gives some idea of the complexity of the issues and the problem that the Government have with these new clauses.

Mr. Letwin: rose—

Mrs. Roche: No, I shall make some progress.
In case all this seems too negative, I repeat that I see considerable attractions in secondary trading that is properly instituted and introduced at the appropriate time. However, the new clauses do not meet the criteria that I have mentioned.
I shall deal with new clauses 6 and 9 together, because they both deal with broadcasting and are closely linked. I have every sympathy with the objective of securing the efficient use of all parts of the spectrum, but I do not believe that the new clauses would do anything to improve spectrum management. As I have already explained, the Radiocommunications Agency, on behalf of the Secretary of State, has the power to allocate spectrum between services, so the provision already exists.
New clause 11 is also unnecessary, as the Secretary of State already has unfettered powers under section 1 of the Wireless Telegraphy Act 1949 to revoke or vary licences and reassign spectrum. The powers are clearly defined in that Act.
In so far as the stated objective of promoting a free market in spectrum is meaningful, it could already be pursued under the 1949 Act without any amendment to that Act. The new clause is unclear and unnecessary.
I have no quarrel with the intention behind new clause 12, but it is unnecessary as it does no more than restate the current position. The Secretary of State, acting through the Radiocommunications Agency, already has inherent powers to allocate spectrum to specific services—again, subject to international agreements—and has power under section 1 of the Wireless Telegraphy Act 1949 to assign spectrum to individual licensees.
As the hon. Member for Daventry said, new clause 15 deals with exemptions from licensing for low-power devices. I understand the intention behind it, but it is not necessary because the appropriate power is already specified in section 1(1) of the 1949 Act. The Government of that day had great foresight in the areas that we are discussing. The power in that Act is to make regulations exempting specific radio equipment from licensing—a power that has been used extensively. I hope that that gives the hon. Gentleman some reassurance.
New clause 19 deals with the Radiocommunications Agency's enforcement powers. Section 1 of the 1949 Act requires the use of the radio spectrum to be licensed unless an exemption has been made. That Act already gives the Secretary of State enforcement powers and stipulates the penalties that the courts may impose. Enforcement is carried out by the authorised officers of the agency, who are subject to the Criminal Procedure and Investigations Act 1996.
The powers already exist and hon. Members will know that the Radiocommunications Agency pursues a vigorous and effective enforcement policy. There is no need to provide a power for the Secretary of State to make regulations to prescribe enforcement actions against those who use the spectrum without authorisation or operate in breach of licence conditions as the 1949 Act already makes adequate provision to that effect. The new clause is therefore unnecessary, although I understand why the hon. Gentleman raised the issue.
As for new clause 20, I fully agree that priority should be given to using the radio spectrum for services that are not technically feasible by any other means, such as those for which mobility is required. However, it is difficult to see what effect the new clause would have, as the idea of encouraging the transfer of services by regulation—again, I use the word used in the new clause—is rather vague.
In any event, the new clause is unnecessary. The whole purpose of clause 2 is to allow the Secretary of State to set fees which take into account a wide range of economic and other factors, and which will therefore reflect the economic value of the spectrum to users. Administrative pricing should ensure that economic pressure is brought to bear on operators to consider whether they are using spectrum in the most effective way.
We have had a full and effective debate. I hope that I have persuaded Opposition Members to withdraw the new clause, but if not, I urge my right hon. and hon. Friends to vote against it.

Mr. Boswell: As the Minister says, we have had a constructive debate on some extremely important issues. We are disappointed that the Minister is disinclined to accept any of our new clauses, but she has made some noises that give us some comfort. In particular, we were interested to hear her support for the principle of a secondary market. If such a great trading Bill were to be initiated—one hopes that it would be less complex than that introduced in New Zealand—Conservative Members, if not Liberal Democrats, now absent, would wish to give it a fair wind.
Having listened carefully to the Minister's assurances, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 8

REPORT OF DIRECTOR GENERAL OF TELECOMMUNICATIONS ON USE OF ELECTRO-MAGNETIC SPECTRUM

'.—The Director General of Telecommunications shall report to Parliament annually on the use of electro-magnetic spectrum as it affects the United Kingdom, and may recommend to the Secretary of State measures for more efficient use of the spectrum.'.—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss the following: New clause 13—Report of Director General of Telecommunications: adverse effects on competition—
'. The Director General of Telecommunications shall report to Parliament whenever he believes that the allocation of electro-magnetic spectrum has had an adverse effect on competition, and, when such a report is made, the Secretary of State may re-allocate the electro-magnetic spectrum as he sees fit to encourage competition.'.
New clause 14—Radiocommunications Agency—
'. It shall be a duty of the Radiocommunications Agency to oversee the management and regulation of the electro-magnetic spectrum, to ensure the effective operation of plans for the efficient use of the spectrum and to make recommendations to the Secretary of State on the most efficient use of available capacity.'.
Amendment No. 4, in clause 2, page 2, line 38, at end insert—
'(d) a report from the Director-General of Telecommunications as to the likely effects on consumers and other users.'.
Amendment No. 11, in page 2, line 38, at end insert—
'(2A) In exercising his powers under section 1 and in his consideration of matters specified in subsection (2) of this section, the Secretary of State shall have regard to the views expressed by the Director General of Telecommunications; and he shall not make any regulations under section 1 unless he has previously received an opinion from the Director General of Telecommunications on the implications of the proposal for competition and consumer benefits.'.

Mr. Boswell: This is a somewhat more manageable group of new clauses and amendments or, to use more

modern phraseology, a rather more focused group, which centres on Conservative Members' concern for consumers' interests. They are very much informed by the contribution of Oftel, and that of my hon. Friend the Member for South Dorset (Mr. Bruce) in reading some aspects of that report, on which he is a greater expert than I am, into the record.
The Minister has shown some encouraging signs of response to the Opposition's position, and it is important that the interests of the consumer and user of radiocommunication services should be built into our consideration and, more particularly, the operation of the spectrum allocation in practice.
My hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who restrained himself during our previous debate, mentioned earlier his concern that the Radiocommunications Agency, which is essentially a technical body with great expertise in that area, might not be by itself the most appropriate vehicle for representing that consumer interest. Our position on the new clauses and amendments is that there should be an Oftel input. That is written across the group.
An analogy could be drawn with the relationship between the Radiocommunications Agency, where the technical experts look at the frequencies and the parts of the spectrum from the point of view of their technical compatibility, and the Radio Authority, which issues licences for broadcasting services with regard to other factors, including the entirely welcome growth of community radio. We may have some reservations about the exact way in which that may be done in future, but it is broadly along the right lines and has been positive for the commercial radio industry.
New clause 8 provides a consumer input into what might become an annual version, albeit perhaps a rather shorter one, of tonight's debate. We could have a debate every year on the annual report. We could ask questions about it and see where we were going. It would not merely be a report in the narrow, historic and archival sense; it would enable the Director General of Telecommunications to recommend to the Secretary of State measures to achieve a more efficient use of the spectrum. We envisage a rolling process of review, assessment and update.
As my hon. Friend the Member for West Dorset (Mr. Letwin) said in his very powerful contribution on the previous group of amendments, we realise how fast technology is moving. Therefore, it will be necessary annually to analyse the position—partly the demand side and partly the supply side, such as the new availability of compression. It is terribly important that that process has a consumer input, and that would meet the Oftel case for involvement.
Many aspects of telecommunications services have an Oftel input, almost by definition. It is important to bear that in mind, given the success—I think I can reasonably claim—of the previous Government, the inclination of the present Government not to reverse at least the basis of that thinking and the structure of regulation in the industry. Of course, the consideration is not specifically about licensing; it is about the policy issues that have arisen, in the director general's opinion, during the year.
The House will appreciate that new clause 13 is closely related to that matter. However, rather than having a technical efficiency test, it has a rather different one—


whether the allocation of the spectrum has had an adverse effect on competition. In other words, to take the hypothetical case mentioned by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), there might be a problem with someone hoarding a series of licences and unfairly occupying an attractive part of the spectrum. That could be deemed to be anti-competitive, which would generate an adverse comment from the director general. In turn, that could lead the Secretary of State to reallocate the spectrum as she thought fit.
I envisage that process of report and decision making strengthening the Secretary of State's position, not least in administrative law. If the Secretary of State were disposed to make the reallocation, it would not be easy for her to establish the grounds under which it would be made. If there had been a separate report from Oftel, that would provide a much stronger basis for her decision. That would be principled, and a good way of going forward.
New clause 14 imposes a duty on the Radiocommunications Agency, and invites it to oversee the management and regulation of the electromagnetic spectrum. Indeed, that is essentially its remit. The new clause is worded to ensure the effective operation of plans for the efficient use of the spectrum and to make recommendations to the Secretary of State on the most efficient use of available capacity. That, again, would underpin her position in administrative decisions, whether on pricing or on reallocation of spectrum, because there would be some principled basis on which she could proceed, rather than it being done arbitrarily. That would help to safeguard her position.
The important point about the three new clauses is that, in different ways, they provide a means of running past both the House and public debate—as well as providing advice to the Secretary of State—some important and sensitive issues relating to the operation of the Bill's objectives.
Amendment No. 4 relates to clause 2, which lists some issues to which the Secretary of State should have regard when exercising
powers under section 1 to prescribe sums payable in respect of wireless telegraphy licences".
The list is pretty comprehensive, but the amendment would provide for the fact that, if there is to be a pricing structure, and the Secretary of State is to make decisions to modify the existing practice, that is likely to affect consumers.
The effects could be direct—for example, how much people would pay for their radio services. They could also be more oblique—if services were no longer available, were priced out of the market or suddenly became increasingly attractive. One of the most attractive features of the radio regime to which I referred is that it has brought in many operators with quite small catchment areas.
The arrangement may not be ideal, but it is certainly a step forward. Oftel could rightly comment on such matters. The overall track record is of a great deal of market liberalisation and some world leadership in the allocation of scarce resources.
Amendment No. 11 would require the Secretary of State to take Oftel seriously. The regulatory process would allow matters to be discussed in the House, so we could look at them and see how they shake out.
The amendments come from slightly different directions, and taken together they send an important signal—from the Opposition and, I hope, from the Government—that the consumer should come first. The new clauses and amendments would provide a suite of measures to ensure that our objective—I hope that it is shared by the Government—can be delivered.
We hope that the Minister will consider whether our proposals are the best way of building the consumer element explicitly into the Bill and whether there are alternatives or, at least, give us the assurances that we, and the consumers that we claim to represent, would want.

Mr. Lansley: New clause 13 and amendment No. 111 concern two important aspects of the Bill that were debated in Committee but were in a sense remitted to a later stage.
As the Minister will recall, it was said in Committee that, if the Minister did not feel able to accept the amendments that had been tabled—their objective was that the duty to pursue consumer benefits should be included in the Bill—the Government should consider, and perhaps table, amendments on Report. Although four months have intervened, the Government clearly have not seen fit to table an amendment in such terms, but it is very desirable for us to achieve a related but different objective by means of the intervention of the Director General of Telecommunications.
1.45 am
Although the Minister was careful to reflect accurately in Committee the representations made to her by the director general, it should be said that the director general has been quite clear about the advice that he would give. Let me pre-empt my hon. Friend the Member for South Dorset (Mr. Bruce), and quote from the letter that the director general sent to my hon. Friend. The director general takes the view that
An unambiguous primary statutory duty to promote the interests of consumers would ensure their welfare underpinned all regulatory decisions.
I well understand why the director general takes that view. Under the Telecommunications Act 1984, he has an obligation to ensure that there is a statutory duty to promote the interests of consumers. On the basis of what is now approaching 14 years' experience of promoting competition and consumer benefits in the telecommunications industry, he rightly sees no reason why he should not, and every reason why he should, impress on the Government the view that the Bill should provide for a similar duty. That is clearly not the route that the Government wish to take, but, if they object, there could be a valuable proxy in the form of the intervention of the director general in the way provided for by amendment No. 11.
Under clause 3, consumer benefits might readily be assumed to be realised in the economic utilisation of the spectrum arising from the auction process, because—in theory, at least—those who are buying will do so on the basis of their best estimates of the economic value that can be derived, and on the assumption that that will be achieved by provision for consumer benefit.
The amendment is therefore not designed to have an impact on clause 3. It is designed to add to clause 2 the provision that the matters that the Secretary of State must take into account in exercising powers under section 1—as it will become—will be circumscribed, in that the powers can be exercised only when the director general has expressed a view on, in particular, the competition and consumer benefits. Until he has expressed such a view, regulations under section 1 should not be made. That will bite on the issue of licences where auctions do not apply.
The point was not responded to in Committee. The Minister may have had a chance to reflect on it since then, and may wish to answer now, but in Committee the Government asserted that all the matters to be taken into account under clause 2 would also, of necessity, be taken into account in issuing licences under clause 3 where auctions applied. It is a matter not just of selling to the highest bidder but one of taking other matters into account.
The Government's clear intention in the Bill was to ensure that the matters specified in clause 2 were dealt with in clause 3. However, curiously—as Ministers have been told—clause 1(5) is designed specifically not to include in clause 3 the regulatory power of clause 1. Moreover, the duty that amendment No. 11 would impose on the Secretary of State to consider the opinion of the Director General of Telecommunications should not be read as implying that an opinion from the Director General of Telecommunications must be received on competition and consumer benefit before, for example, a licence is sold at auction.
It might be useful if the Minister were to tell us whether she has had an opportunity since our debates in Standing Committee to reconsider whether our construction of the Bill was accurate. The question—which is perhaps best dealt with in debate on the next group of amendments—arises of how, despite Ministers' assertions, those important matters to be considered are dealt with in clause 3.
The debate in Standing Committee on consumer benefits was important. Although the Director General of Telecommunications is not the final arbiter of consumer benefit—in all markets, the consumer is the final arbiter on that matter—that person is a good proxy as the final arbiter.
As Members on both sides of the Committee felt that it was desirable that consumers should be the ultimate beneficiaries of the process, I was surprised at the length to which Ministers went to specify in the Bill provisions that they themselves regarded as something of a proxy in delivering benefits to consumers, and at the fact that they would not make that clear. In Standing Committee, the Minister said, for example:
Consumers are important, but why should they be singled out above all other interests, such as operators and manufacturers?" —[Official Report, Standing Committee A, 13 November 1997; c. 120.]
That is a very strange approach.
If I were to talk to operators and manufacturers, I do not think that they would say, "We think we should be treated on an equal basis with consumers; we all have interests as stakeholders in this industry. The Government should not put consumer interest above the interests of mobile telephone operators or of fixed-link radio operators." I think that they would say, "Yes, you should put consumer interest first, because we think that that is

the primary interest. If we in industry do not serve consumers first and provide them with benefits, there is no purpose in being in industry or in utilising spectrum for commercial purposes."
If—as I have always found to be true—industry is prepared to put consumers first, it is extraordinary that Ministers should themselves be unwilling to put them first, as can readily be done. The possibility open to Ministers is to use the Director General of Telecommunications, who has proved to be a tried and tested pursuer of consumer benefit.
In the past few days, we have been reminded—by the strictures of the retiring Director General of Telecommunications to mobile telephone operators on their charges for fixed-link calls to mobile telephones—of the vigour with which the director general pursues consumer interest. It would be very difficult to dispute that the current director general, or his successor, is anything but a useful and valuable proxy in establishing consumer benefit.
The second value of new clause 13 and amendment No. 11—the point was well made by my hon. Friend the Member for Daventry (Mr. Boswell), so I shall not elaborate—is that, by taking that route, we diversify the sources of advice to the Secretary of State on the utilisation of spectrum, not only for technological purposes but in relation to the development of compression techniques and other uses which are not necessarily in the commercial arena.
The advice of the Director General of Telecommunications will enable the Secretary of State to link decisions taken on the allocation and use of spectrum to an economic analysis—with which the Director General of Telecommunications is increasingly concerned, because of the pricing control mechanisms applied in the telecommunications industry generally—and to an analysis of the convergence of different technologies of broadcasting, telecommunications and radio telephony.
I take the point made by my hon. Friend the Member for Esher and Walton (Mr. Taylor) that, as those technologies converge, legislation should not become too tied to technology. If we include the Director General of Telecommunications explicitly as a source of advice to the Secretary of State on issuing licences, the Secretary of State will be better equipped to take decisions, having benefited from an intimate understanding by the appropriate regulatory body of the convergence of communication industries and of telecommunications services. That will improve decision making.
We need not elaborate the advantages that the Radiocommunications Agency brings to these questions. Notwithstanding those advantages, the agency would not necessarily assert that its specific expertise on telecommunications industries generally, or its economic analysis, was superior to that of the Office of Telecommunications. I believe that the Radiocommunications Agency would acknowledge that the Office of Telecommunications can add value to decisions taken in this context.
I single out for the Minister, from the valuable group of new clauses and amendments before us, new clause 13 and amendment No. 11 as measures that would especially serve to improve the Bill. They would help the Secretary of State to take decisions, and they would provide


reassurance. The latter aspect has been strongly emphasised tonight by Conservative Members, and it was emphasised in Committee by Liberal Democrat Members, who are not now present.
The benefits of explicitly providing for the consumer interest were very much to the fore in our deliberations in Committee. The Minister has an excellent opportunity to respond positively to the debate in Committee by amendment on Report.

Mr. Ian Bruce: I am grateful to be called to speak at this early hour, and I do not intend to make a long speech on this group of amendments.

Mr. Ivor Caplin: Hear, hear.

Mr. Bruce: I am grateful to the hon. Gentleman, who has just come into the Chamber.

Mr. Caplin: I have come in specially.

Mr. Bruce: I am pleased to hear that he came in specially. I am even more grateful because, obviously, all this will make the newspaper headlines.
I shall be brief. An aspect to which we drew attention by tabling the new clauses and amendments was that we felt that there was ambiguity as to which regulator did what. In Committee, I made a detailed speech about the large number of regulators. I said that, in every Bill of this nature, one regulator seems to be asked to do everything, even though it is not quite appropriate, and I said that it was difficult to choose the appropriate regulator for the purpose.
In these new clauses and amendments, we have tried to express our preferences in terms of who does what—the Office of Telecommunications or the Radiocommunications Agency. One factor is the consumer interest, which we touched on earlier. I always rely on the Director General of Telecommunications—or the two that we have had—to give us an honest answer. When he is leaving his job, no one can suggest that his comments are directed at trying to play himself in for another five years. Mr. Cruickshank's valedictory message was that the legislation should be consumer-oriented. I also think that, as well as a convergence of technology, we must ensure a convergence of regulators.
What I am saying is Labour party policy. Before the general election, Labour came to certain conclusions about reducing the number of regulators.

Mr. Clive Betts: Can the hon. Gentleman take a little more time?

2 am

Mr. Bruce: The Whip would like me to spend a long time explaining that the Radiocommunications Agency is one agency, the Telecommunications Agency is another and they are both in new clauses 8, 13 and 14 and the amendments. I can go into more detail if the

hon. Gentleman would like, but I would rather sit down in a couple of minutes. I hope that he will contain himself a little longer.
We must try to bring the agencies together, to ensure that we have the most appropriate agency in the short term. We have tried to draw up helpful new clauses and amendments to ensure that. In the longer term—not too long, I hope—we must try to bring the agencies together.
I should like to give a plug to a report by EURIM—I must spell that for Hansard, because I am always sent a note otherwise: E-U-R-I-M. It stands for the European Informatics Market group—I seem to be the only person who knows that. The report concluded that, instead of some 15 agencies dealing with the issues, there should be just one. That is a radical proposal, because it would require the removal of 14 director generals of other agencies. I understand the difficulties of the proposal, but I should like to flag it up in my short contribution.
We cannot look at legislation in isolation. We cannot simply say, "This is a radiocommunication; this is a telecommunication; this is broadcasting; this is satellite." They are all electromagnetic signals. They are all caught in some ways by the relevant legislation. It would be logical to bring them all together as soon as possible. That would help us to use electromagnetic spectrum in the most efficient way.
I promised to make a short speech. I hope that we can rely on the Minister to spend a bit more time telling us either that she will accept the new clauses and amendments or how she will work towards the issues that they deal with in the near future.

Mrs. Roche: I have listened carefully to the debate. It is right to have a discussion about consumers, but I hope to convince Conservative Members that the new clauses and amendments are not necessary.
New clauses 8 and 13 deal with reports by the Director General of Telecommunications. Section 55 of the Telecommunications Act 1984 requires the director general to report annually to the Secretary of State with a general survey of developments during the year, on matters falling within his functions. The Secretary of State is then required to lay the report before Parliament. Therefore, that is already laid down in the Act.
The director general also has a specific duty under section 51 to advise on licensing under the Wireless Telegraphy Act where that involves telecommunications, and to give advice to the Secretary of State on spectrum management issues. I consider, and the director general agrees, that new clause 8 is completely unnecessary, as it merely duplicates the effect of existing provisions.
New clause 13 also requires the director general to report to Parliament if he believes that the allocation of spectrum has had an anti-competitive effect, and empowers the Secretary of State to act to reallocate the spectrum, to encourage competition. The director general already has a general duty under section 3(2)(a) of the Telecommunications Act to maintain and promote effective competition in telecommunications and, under section 49, to consider any matter that relates to telecommunications services. The director general therefore already has an obligation to report to Parliament on developments in spectrum management that adversely impinge on competition.
I understand completely where the hon. Member for Daventry (Mr. Boswell) is coming from; I understand his concerns, but the legislation is already in place to enable the director general to do just what the new clause would require. I consider, and the director general agrees, that the first leg of the new clause is completely unnecessary, as it merely duplicates the effect of existing provisions.
The second leg of the new clause is also unnecessary. The Secretary of State already has inherent power to allocate and reallocate spectrum and has wide discretion in the granting of licences. She may already pursue the promotion of competition in the exercise of spectrum management power. I hope that that provides some reassurance for the hon. Member for Daventry.
Amendments Nos. 4 and 11 also refer to reports from the Director General of Telecommunications. In supporting them, Conservative Members raised important issues about consumers. I emphasise, as I did in Committee, when we had a lengthy debate on a similar amendment, that the Government attach considerable importance to consumer interests both generally and in the context of spectrum pricing.

Ms Linda Perham: As my hon. Friend knows, I represent a constituency where there are many licensed taxi drivers. Is she aware of how much members of the National Federation of Taxicab Associations appreciate the open, fair and constructive way in which the Government have consulted consumers and how much they appreciate the reassurances that have been given?

Mrs. Roche: I thank my hon. Friend very much for that important intervention. The Government are extremely grateful for the continuing contact that we have had with the federation and the contribution that it has made.

Mr. Lansley: Will the hon. Lady give way?

Mrs. Roche: No, I want to make some progress.
The House will no doubt agree that effective spectrum management and the promotion of innovation and competition are powerful forces acting on the consumer's behalf. Effective spectrum management enables more service providers to access the spectrum. That promotes competition and innovation, which increase consumer choice and drive prices down. It is no coincidence that competition and innovation are listed in clause 2(2) as matters to which my right hon. Friend the President of the Board of Trade is required to have particular regard. In addition, clause 2 requires the Secretary of State to have regard to economic benefit. That includes benefits for consumers. There can be no doubt, therefore, that clause 2 already provides for consumers' interest to be taken into account and will work to the benefit of consumers.
As part of the consultation process, my right hon. Friend the Secretary of State and I would welcome the views of the Director General of Telecommunications on any aspects of proposed licence fees. We regard that as very important. When we seek that consultation, it will include the effects on consumers and other users. We shall give them the most serious consideration.
It is appropriate to take this opportunity to pay tribute to the distinguished record of the present director general in promoting consumers' interests. Don Cruickshank has done an excellent job, and I am sure that all hon. Members wish to express their warm appreciation of his great contribution. That contribution is also recognised internationally—the director general is held in extremely high regard. However, there is no need to amend the Bill as proposed, as it already effectively requires that the director general's views be taken into account.
Because we place such weight on consumers' views, we consulted bodies representative of consumers at an earlier stage of the Bill. The National Consumer Council advised:
we are not supporting or opposing any amendments to it".
The Consumers Association said that it was
not aware of anything contained therein that we would object to".
We have also consulted, and listened to, other groups. There was mention in Committee of the views of the Joint Radio Company of the energy companies. I am pleased to say that the chairman of the JRC wrote to me afterwards, and said:
I am writing to express our appreciation for the extent to which the Government expressed its commitment to issues of importance to the utilities during the Committee stage of the Wireless Telegraphy Bill… The debate showed a very full and comprehensive understanding of our concerns and we are grateful for the assurances given.
The Telecommunications Advisory Council of the water industry also wrote confirming that it has been
fully supportive of the spectrum pricing process".
We are very grateful for those comments. I hope that I have provided the assurances on those points that Conservative Members were seeking.
Amendment No. 11 suffers from the serious defect that it would place an implicit duty on the director general to submit observations on the implications of all fee proposals for all consumers. If the director general decided, for whatever reason, not to express views, the Secretary of State would be prevented from making the regulations, even if they involved fee reductions. It is not acceptable that the Secretary of State should be subordinate to the director general in the way that amendment No. 11 would provide. I am sure that Opposition Members did not intend that to occur. It would place the director general in a very difficult position, and I do not believe that it is appropriate.
In summary, amendments Nos. 4 and 11 could distort the operation of spectrum pricing. As to new clause 14, I note the interest on the part of Opposition Members to put the spectrum management duties of the agency on a statutory basis. However, I cannot help but observe that the Conservative Government established the agency in 1990 under the next steps programme. The agency's aims and objectives are set out in its framework document, which is agreed by Ministers. It specifies that its mission is to facilitate access to radio spectrum of the appropriate quality, for the widest range of services, and so promote the creation of wealth, competition, quality and choice. Therefore, there is no need to have further statutory powers to define the agency's duties—and indeed to do so in the way that the new clause seeks would unnecessarily restrict the future range of operations.
I hope that I have answered the points raised by Opposition Members, and I invite them not to press the proposed new clauses and amendments.

Mr. Boswell: In the light of the Minister's assurances, and adding, solely as a point of substance, that we echo her warm praise for Don Cruickshank's record, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

New clause 10

DIFFERENTIAL LEVELS OF FEES

'. The Secretary of State may impose higher fees for those technologies which make inefficient use of the electro-magnetic spectrum than those which use the spectrum efficiently.'.—[Mr. Boswell.]

Brought up, and read the First time.

Mr. Boswell: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Michael J. Martin): With this, it will be convenient to discuss the following: New clause 16—Allocation of licences other than under section 3—
'.—When allocating licences other than by the procedures set out in section 3 (Bidding for licences), the Secretary of State shall have regard to the level of bids received in any similar circumstances when setting the fee to be charged.'.
New clause 17—Administrative pricing—
'.—When setting the level of administrative pricing for a particular section of the electro-magnetic spectrum, the Secretary of State shall have regard to the fee that might be levied if that section of the spectrum was used for a different purpose.'.
New clause 18—Pricing for different parts of the electro-magnetic spectrum—
'.—When setting prices for the use of different parts of the electro-magnetic spectrum for the same purpose, the Secretary of State shall take into account the variations in cost to the operators of using different parts of the electro-magnetic spectrum.'.
Amendment No. 2, in clause 1, page 1, line 15, at end insert—
'(2A) The sums prescribed or determined under subsection (2) shall not in total exceed by more than twenty-five per cent. the sums charged for licences in the financial year in which this Act is passed.'.
Amendment No. 12, in clause 2, page 2, line 38, at end insert—
'(d) the relative investment required to provide a service utilising the respective parts of the electro-magnetic spectrum.'.
Amendment No. 14, in clause 3, page 2, line 45, after 'regard', insert 'both'.
Amendment No. 15, in page 2, line 46, after 'spectrum', insert
'and the securing of investment in development of telecommunication services.'.
Amendment No. 16, in page 3, line 18, leave out
'as a cash sum'.
Amendment No. 17, in page 3, line 22, leave out
'as the amount of a single payment or'.

Amendment No. 18, in page 3, line 23, at end insert
'subject to a limitation that the payment which may be bid shall not exceed 5 per cent. of the income wholly or partly attributable to the holding of that licence'.
Amendment No. 7, in page 4, line 10, at end insert—
'(9) The sums payable to the Secretary of State under this section shall not exceed £1,000 million.'.
Amendment No. 10, in clause 10, page 6, line 3, at end insert
'except as provided in subsection (3) below.
(3) Section 3 of this Act shall not come into effect until Community legislation is passed setting for all Member States rules for bidding for wireless telegraphy licences.'.

Mr. Boswell: Although the new clauses are set out at the beginning of the group, those in my name and the names of my hon. Friends essentially rehearse matters to which the Minister has already replied concerning the flexibility of pricing. I do not intend to reopen those issues at this hour. The group contains a number of amendments tabled by my hon. Friends, and it is for them, rather than me, to comment on any matters that they want to raise.
Briefly, I shall return to the points of substance that stand in my name. These are matters of great import and I am not sure that I would necessarily and realistically expect the Minister to accept them as they stand, but they send out an important signal about the costs of the operation. The hon. Lady will recall from debates on Second Reading and in Committee that there is a real doubt—perhaps I should say a suspicion—on the Conservative Benches that the mechanism offers the potential for a significant revenue-raising operation. We tabled the amendments in that spirit and to give some flesh to the assurances that the hon. Lady has already floated in Committee.
To deal with them briefly, amendment No. 2 prescribes that the total uplift in income should not
exceed by more than twenty-five per cent. the sums charged for licences in the financial year in which this Act is passed.
That might be a reasonable extra accrual of revenue. Indeed, at an earlier hour my hon. Friend the Member for South Dorset (Mr. Bruce) was metaphorically licking his lips at the almost boundless revenue-raising possibilities that he envisaged from that source. We will not hold that against him, but we want a practical limit. An alternative way would be found through amendment No. 7, which imposes a limit on the total return to the process of £1 billion. I invite the Minister to comment on those amendments.
Equally, amendment No. 18, on the bidding process, would restrict the cash sum payment to 5 per cent. of the estimated income from the issue of the licence. That would curtail any attempt to buy licences regardless of cost, perhaps to close them down or put competitors out.
Finally, to make the point, amendment No. 10 suggests that commencement of the Act might be deferred until the Community rules on spectrum allocation are clear. That echoes a point that the Minister made earlier, which is that we clearly cannot conduct our operations purely in a vacuum and it is important that we are sensitive to that, that we have some awareness of what is going on in other countries, learn from their experience and share it.
There is also a practical point. I think that I reversed my anecdote. It should have been that the car radios set off all the garage doors in Kent—I cannot remember which way it went, but it does not really matter. The point is that, if two radio systems adjoin each other, they will inevitably impact. Therefore, I am convinced that it is important for the Government to take serious account of what is going on in the near continent.
Ministers should have regard to the fears that have been expressed that this is a major fund-raising exercise. Next week, the Chancellor will open his Budget. I doubt whether he will be talking explicitly about this, but we would deprecate any attempt to raise incalculably large sums through the back door in a way that had not been covenanted, has not been flagged by Ministers and would amount to a substantial breach of faith. I hope that the Minister will give us assurances, which we can then test against the way in which these measures and the pricing formula pan out in practice.

Mr. Letwin: I intend to be enormously brief. I want to amplify the point made by my hon. Friend the Member for Daventry (Mr. Boswell) on new clause 16, with a slight nod towards new clause 17. I hope that, not only in her closing remarks this morning, but, more important, in her subsequent considerations in the Department, the Minister will take account of the intention behind the new clauses.
It is extraordinarily important that no future holders of her office should disjoin the administrative prices that are set for some parts of the spectrum and the bid prices that are established in the open market. That is not to say—my hon. Friends have been careful in phrasing new clause 16—that there may be no difference, but we tabled the new clause to ensure that any Minister responsible for administrative pricing refers back to the relevant information from the bid prices.
Any decision that is made about a particular part of the spectrum without regard to the bid prices could distort the entire market. I am sure that the Minister will assure us that it would be her usual practice to refer to the bid prices—the main intention behind new clause 16 is to ensure that she puts that on the record, so that we have a clear understanding of how Ministers will deal with administrative pricing.

Mr. Lansley: I welcome what the hon. Member for Ilford, North (Ms Perham) said about radio taxis, which reminded me—this may amuse the hon. Member for Cambridge (Mrs. Campbell), who has been very patient during our proceedings—that Camtax, which operates in both her constituency and mine, has radio licence No. 1 for these purposes. I do not know whether she knew that, but it is another distinction which falls on our constituencies.
New clause 18 would enjoin the Secretary of State to
take into account the variations in cost to the operators
when setting administrative pricing. An example of what I hope the Minister would take into account is the difference in the infrastructure costs of delivering services between operators at 900 MHz and those at 1.8 GHz. The propagation characteristics of the two affect the costs incurred in providing a service. It would be wrong for administrative pricing not to reflect the infrastructure

costs of providing a service at that higher frequency, which would necessitate the construction of more telecommunications masts.
Amendments Nos. 14 and 15 are linked. They would enjoin the Secretary of State to take into account
the securing of investment in development of telecommunications services".
I hope that the value of that is self-evident, but I shall relate the amendments to a specific issue on which I would welcome the Minister's reassurance.
In our previous debates, Ministers said that they had no intention of applying spectrum pricing to the fixed-link radio operators operating at 10 GHz. The issue is an important one for them. Such operators have an onerous roll-out obligation, which involves the acquisition of additional spectrum in order to meet the obligations that they have taken on. Having done that under one regime, operators have a sense of jeopardy about moving to a different regime.
To pursue the issue of Ministers' present and future intentions, will the Minister confirm either that the Government will not impose spectrum pricing while the 10 GHz operating companies meet their current roll-out obligations, which means not before 2003, or that, in the event that the Government impose spectrum pricing before 2003, Ministers will accept that that will cancel or, perhaps by agreement, mitigate companies' roll-out obligations?

Mr. Ian Bruce: There has been quite a long time between the Committee and Report stages of the Bill. I emphasise my hon. Friend's point about commitments from the Government Front Bench about funding. Although we are only a few days away from the Budget, I wonder whether we can have a better steer from the Minister about exactly how much she is now expecting. Has there been any change in her expectation?

Mr. Lansley: I am grateful to my hon. Friend, not least because he takes me directly to the third set of points that I want to make, which relate specifically to amendments Nos. 16, 17 and 18. To save time, I shall not explain why those three amendments are linked. There are two questions. The first is slightly tangential. We have not really found out anything much, even since the Committee proceedings four months ago, about what Ministers expect to be the broad quantum of increases in charges to operators by way of administrative pricing.
Many of us would be hard put to know the orders of magnitude. Will the cost of licences increase by perhaps 20 or 30 per cent? One might say that that is a significant increase. Are we talking about much greater increases? It would be helpful if the Minister would say what orders of magnitude of increases—

Mr. Ian Bruce: Or decreases.

Mr. Lansley: Of course. The purpose of administrative pricing is not necessarily to raise money but more efficiently to utilise the spectrum, which, in certain circumstances, may mean reducing fees to promote active use of the spectrum.

Mr. Bruce: I do not want to delay the proceedings, and I know that I do not really need to remind the Minister of


this, but I recollect that, in Committee, we talked about fishermen's and other licences. The new regulations will give the Minister the opportunity to make adjustments. Pleasure craft pay far less than fishermen, and fishermen get very upset about that, especially as their radios are a safety mechanism.

Mr. Lansley: I agree with my hon. Friend. He will forgive me if, being quite so landlocked as we are in Cambridgeshire, I do not know as much about the fishing industry as he does. It would be helpful if the Minister would tell us both the quantum of the increases that are contemplated under administrative pricing and why Ministers feel that relatively large increases in some cases might be justified by reference to the benefits in the utilisation of spectrum. Some operators, including some of the mobile phone operators, have considerable commercial pressures to utilise spectrum as efficiently as they can. It does not necessarily follow that paying much larger fees will change their behaviour. One wonders whether the increases in fees that they might have to pay are objectively justified by reference to the economic utilisation of spectrum allocated to them.
2.30 am
The benefits of amendment No. 18 may not be immediately obvious to hon. Members. An auction where people can bid whatever they like, which maximises income, might seem the most obvious course. By extension, to stipulate no more than 5 per cent. of the income attributable to the holding of the licence might simply restrict the Government's revenue and might therefore seem undesirable. However, Ministers should actively contemplate the amendment, as it has specific benefits.
The first benefit, which is related to amendments Nos. 16 and 17 as well, is that instead of a cash sum being payable up front, periodic payments are implied. The income to Government is specifically related to the roll-out of investment and the undertaking of the economic activity in question. The Government become, in that sense, a risk sharer. That reminds me of the time when, in the Department of Trade and Industry, we were engaged in launch aid for aerospace activity. If the Government are to be involved in commercial decision taking, it is good that they should be a risk participant.
The second benefit is that people who are making bids to the Secretary of State will have to specify not just what they are willing to pay, but how that is to be raised by economic use of the spectrum. That means that one will see, from those who are making bids, how the utilisation of the spectrum will generate income. The heart of the purpose of the Bill will be disclosed in the bidding process, whereas, otherwise, many of those who are making bids may meet the stated requirements that the Secretary of State may stipulate by regulation, but rest the burden of their case simply on the amount that is to be raised. That may lead us into a situation where the less valuable economic utilisation is the highest bidder, but comes to grief.
Ministers may not warm to the third benefit of amendment No. 18. It sets a limit on the amount that is to be raised in the tax, in relation to the income stream to

which it is to be applied. Conservative Members, and perhaps Labour Members to a lesser extent, hold the view that, if we must have taxes, as we do, the taxes applied at a relatively low percentage rate in relation to the income stream to which they are applied will have less damaging economic effects than those that rise to a relatively high percentage level.
The sum of £1.5 billion, which is the maximum figure referred to in the explanatory and financial memorandum to the Bill to be raised through auctions, may be 5 per cent. of the income stream attributable to those licences, or it may be 10, 15 or 20 per cent. I have no way of knowing. All I know is that about £2.7 billion of turnover is attributable to the mobile phone operators. If that is any guide, £1.5 billion by way of revenue on the auction seems to be an extremely high sum, and therefore potentially a very high percentage sum in relation to the income stream to which it is to be applied.
I endorse all that was said by my hon. Friends, especially by my hon. Friend the Member for Esher and Walton (Mr. Taylor), who had responsibility for these matters, about the fact that the first-mover advantages of telecommunications liberalisation, mobile telephony and so on in British industry have been tremendously important in wider economic terms. The last thing we should do by way of auctions of spectrum is to leave that important section of British industry in a position where it is effectively taxed to a relatively higher proportionate level on its income stream, and therefore on its investment and its opportunity to exploit economically the spectrum it has bought.
If the Minister can assure us that the £1 billion or £1.5 billion about which she is speaking will be less than 5 per cent. of the income stream—a figure which I picked because it was a modest percentage—I would be happy not to press my amendment. However, we need some sign from the Minister of what tax level she is contemplating by way of the auction pricing mechanism.

Mrs. Roche: The amendments and new clauses in this group concern the operation of spectrum pricing in the form of administrative pricing or auctions. New clause 10 would allow higher fees to be set for less spectrum-efficient technologies. I understand the underlying thought behind it, but clause 2(2)(c)(i) already obliges the Secretary of State, in setting fees, to have regard in particular to the desirability of promoting the efficient use of the radio spectrum.
I am grateful to hon. Members for explaining the purpose of new clause 16. I do not believe that it would serve a useful purpose. I would point out, however, that among the matters the Secretary of State is required to take into account, are
the demand and likely future demand for the use of the part of the electro-magnetic spectrum to be used under licences of that description".
To the limited extent that the experience of auctions is likely to be relevant to decisions on administrative pricing, the Secretary of State will take into account the lessons to be learnt. In the light of this assurance, I hope that the hon. Member for Daventry (Mr. Boswell) will be willing to withdraw the amendment.
I do not believe that new clause 17 would improve the operation of administrative pricing under clause 2, which requires the Secretary of State to have regard to factors


such as spectrum efficiency, economic benefits, innovation and competition. The new clause refers to the fee that might be levied if the section of the spectrum was used for a different purpose, but it leaves completely undefined the nature of the different purpose. Much spectrum may have more than one alternative use. How the fee would be assessed is left open. Moreover, the new clause could lead to some substantial increases in fees, especially for fixed links occupying spectrum around 2 GHz that could be used for mobile communications.
New clause 18 also concerns the setting of administrative prices. I have sympathy with the underlying proposition that spectrum pricing should take into account differences in the intrinsic value of different parts of the spectrum and should not distort competition, but it is not necessary to amend the Bill to achieve this.
It is axiomatic in spectrum pricing that fees should reflect the value of the spectrum. Clause 2(2)(c) already requires the Secretary of State to have regard to the desirability of promoting the efficient use of the spectrum, any economic benefits arising from the use of wireless telegraphy and, most important in this context, competition in telecommunications. I hope that I have convinced the hon. Member for Daventry that it is not necessary.
Amendment No. 2 would undermine the effective operation of spectrum pricing. We have given repeated assurances during the passage of the Bill that spectrum pricing will be used for the purposes of spectrum management, not revenue raising.
As the hon. Member for Daventry knows, we have continued to work closely with the industry since the consultation document was published. One of the most significant issues that we addressed was the fees to be paid by cellular and personal communications network operators whose fees under the present cost-based regime are much less than those of other mobile communications users.
I am pleased to tell the House that my officials have held a series of meetings with each of the four main mobile telecommunications operators to consider how the new fee arrangements might best be introduced. There has been an open and transparent consultation process with the operators and I am grateful for the contributions that they have made and their helpful and constructive participation.
We agreed with the operators that the increase in the forthcoming regulations would be the first step in phasing in the higher fees over a period of at least three years. As a first step towards the new fees, we agreed with the four operators to apply a single percentage increase of 120 per cent. to the fees that cellular and PCN operators would have paid under the current regulations. The new fees will take account of changes in the spectrum assigned to them and the original escalator applied to PCN operators' fees.
The other change that we propose to make in the first regulations is to introduce reduced fees for users of on-site private business radio systems. These are typically used in industrial applications or in high street stores. There are some 22,000 on-site services that currently pay on the same basis as systems that cover a wide area. At present the minimum fee is £140, increasing progressively with the number of mobiles used, irrespective of the number of sites, so that, for example, a licensee with 26 to 60 mobiles would currently pay £500.
I am pleased to announce that we propose to introduce in July a flat fee of £125 for each on-site system, irrespective of the number of mobiles used. The majority of users will therefore benefit from a significant reduction, although a few users with multiple sites and only a few mobiles may pay slightly more than under the current regulations. We intend most users to benefit from a further reduction in 1999, although those in areas of heavy congestion, and users with multiple frequency assignments at a single location, may face an increase.
We intend to undertake further consultation on the proposals for the new regulations prior to the statutory consultation under clause 6. Subject to the passage of the Bill, the new regulations will represent an important step forward in levelling the playing field between the various categories of radio users. It is important that we continue that process.
The hon. Member for South Dorset (Mr. Bruce) mentioned the important issue of fisheries. I have considerable sympathy with the view and have concluded that we do not need to wait for the introduction of new powers to rectify the situation. Therefore, last week, I laid before Parliament amending regulations to introduce a number of helpful changes to the current regime. As a result, from 1 April, up to 10,000 commercial vessel owners will benefit from a reduction of 45 per cent. in the ships radio licence fees that they now pay.
I am grateful to the hon. Gentleman for his approval; I was slightly disappointed that his hon. Friends prayed against the order. I am rather confused about that, as the hon. Gentleman raised the issue, which found favour with me.

Mr. Ian Bruce: I thank the Minister for announcing the reduction. I am sure that my fishermen will be pleased. My hon. Friends may have prayed against the order so that it would come to the Floor of the House, or at least into a Committee, so that we could congratulate her and, perhaps, press her a bit further.

Mrs. Roche: I congratulate the hon. Gentleman on his ingenuity and look forward to the congratulations. I hope that I have succeeded in my attempt to persuade hon. Members of our good faith, as shown by our actions, and I remind them that the Bill contains vital safeguards against excessive fees.
Amendment No. 12 is similar to new clause 18. For exactly the reasons that I have already outlined, I advise the House not to proceed with it.
Amendments Nos. 14 and 15 concern auctions. I ask the House not to proceed with them as they would not serve a useful purpose. Hon. Members have explained them by saying that the requirement for substantial cash payments for licences would weaken licensees' financial position and ability to roll out services. I cannot accept that idea. Businesses must be the best judges of what they can afford to pay for a licence. In deciding whether to bid in an auction and determining the level of their bids, they will naturally undertake their own financial projections. They will need to balance the capital cost of setting up and rolling out a service against the expected revenue from the provision of that service. Such calculations are an essential part of the business world, and will be well understood.
2.45 am
I must also ask the House to reject amendments Nos. 16, 17 and 18 which, as Opposition Members may intend, would emasculate the auction provisions. Perhaps I shall give hon. Members the benefit of the doubt and trust that they did not intend their amendments to have that effect, but that is what would happen. The amendments would eliminate the possibility of the most common kind of auction, in which bids are expressed as a simple cash sum, but leave open the possibility of the so-called royalty auction in which a bidder undertakes to pay a proportion of anticipated revenue.
I can see no merit in the amendments. The straightforward cash auction has been favoured in the great majority of wireless telegraphy auctions throughout the world. I accept that in some circumstances the royalty auction may have value, but the precise level of payment appropriate under a royalty auction depends on the circumstances of each individual case and to seek to specify a maximum level of payment in the Bill, as amendment No. 18 proposes, is pointless and would deprive the Secretary of State of the flexibility that will be crucial in considering which auction designs might be appropriate for the wide range of potential auction candidates.
Amendment No. 7 suffers from similar defects, and I find it hard to see the logic behind it. It would serve no useful purpose. A properly designed auction will achieve a price that balances supply and demand and, as I hope Opposition Members will agree, it would be wrong to put an artificial ceiling on that process.
It must also be borne in mind that amendment No. 7 would apply to all future auctions held on the basis of the power in clause 3. The financial ceiling would be reached sooner or later and the amendment would then rule out any further auction in the absence of amending legislation. The amendment is both unnecessary and unworkable, and I invite the House to reject it.
As for amendment No. 10, the arguments in favour of auctions as a method of assigning licences should be well understood by Opposition Members. After all, it was their own party's White Paper that proclaimed the importance of using the method.
Legislating at Community level on such a detailed technical matter as auction procedures would be unwise and inconsistent with the principles of subsidiarity. The licensing directive already provides a sufficient Community framework for auctions, and I urge the House not to proceed with the amendment.
Finally, I was asked about radio fixed access. Those services are relatively new entrants to the telecommunications market and we recognise their pioneering work in increasing competition and choice in telecommunications. To avoid disrupting their business plans, and in the interests of promoting competition, we do not at present intend to increase their spectrum fees.
I hope that I have now convinced Opposition Members not to press their new clauses and amendments.

Mr. Boswell: I do not accept every line of argument that the Minister has deployed, but in view of the helpful assurances that she has been able to offer us, I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

Order for Third Reading read.

Mrs. Roche: I beg to move, That the Bill be now read the Third time.
The House will be relieved to know that I do not intend to detain it for any great time. I feel the presence of the Deputy Chief Whip beside me and I know how anxious hon. Members are for this important Bill to complete its passage through the House.
It is impressive how far radiocommunications have come since the first wireless messages were sent around the world 100 years ago. We all know about the great contribution that radio makes to our economic and social life.
The radio spectrum is a finite resource and, unless we can continue to create spectrum headroom for future growth, we will not realise the full economic benefits and competitiveness gains from this dynamic and successful sector of the economy. The importance of the Bill is that it will provide new tools to manage the spectrum resource more effectively.
The Bill is important. It was introduced in the other place and I gladly acknowledge their Lordships' contribution and commitment to its development. The Bill is about Britain's economic well being and it will provide wealth, jobs and economic opportunities for the British people. I commend it to the House.

Mr. Boswell: I recall, as I was growing up, an elderly friend of our family—a Cornishman—who, as a very little boy, used to meet Mr. Marconi on the beach. As a result of that connection, he went to work for Marconi in Chelmsford for his whole life.
Despite the huge technical changes that have taken place in the radio industry, there is a certain stability in the legislative framework. We legislated in 1904 and in 1949. We are legislating again now, and it is important that we get it right.
Our debates have helped to test the Government's intentions, for which they are particularly welcome. To the Minister's thanks to all those who have participated—I add my thanks to the Minister for some of the explanations that she has been able to give us—I add my personal thanks to my colleagues, many of great expertise, who have participated in and adorned the discussions and helped to get assurances on the record.
I also single out, although she is not now with us, the contribution of my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan), who has sat through almost all our deliberations this evening and has supported me in my first excursion into wireless telegraphy at the Dispatch Box.
Inevitably, there are areas of unfinished business in the Bill. One is the way in which, in practice, the pricing structure of the licences will develop and, related to that, how the management of the spectrum will develop. We have had assurances on those points tonight; we shall need to test them in the event.
Secondly, we heard the Minister's interesting forward look on the possibility of further legislation, possibly on secondary pricing, for example. We welcome that in principle and hope that she will bring it forward in this Parliament. We should like to be part of the process of taking that matter forward.
For tonight, the Minister has given assurances and, in the light of those and the earlier discussions that we have had, I shall not seek to divide the House on Third Reading.

Mr. Ian Bruce: Earlier, I was asked whether I had anything left in my carafe. It is half full or half empty, depending on whether one is an optimist or a pessimist.
I want to set hon. Members' minds at rest by saying that I rise only to congratulate the Minister on the way she has brought this Bill to its conclusion. It is interesting that a Minister can, despite being pressed in all sorts of different directions, keep her cool and continue to be charming at almost 3 o'clock in the morning. She has shown that despite the blandishments of the Whips around her, we were able to complete our business in sensible time.
I remind the House that the full Report stage and Third Reading of a major Bill which has major implications, have been completed in four and a half hours. That is four and a half hours at a very late hour not because of Back Benchers and not because of the Opposition, but because the Whips decided to put on a major Bill after other business. I am not, therefore, in any way apologetic. I never go to bed before 3 am anyway, so this is an ideal time for me.
I thank the Minister for her contribution to my fishermen. They will be very pleased at the reduction that is coming, even before the Bill reaches the statute book. I congratulate her on what I think is the first Bill that she has taken through all its stages to the statute book.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with an amendment.

NORTHERN IRELAND GRAND COMMITTEE

Ordered,
That—

(1) the matter of the Northern Ireland economy, being a matter relating exclusively to Northern Ireland, be referred to the Northern Ireland Grand Committee for its consideration; and
(2) at the sitting on Thursday 26th March—

(i) the Committee shall consider, pursuant to Standing Order No. 114 (Northern Ireland Grand Committee (legislative proposals and other matters relating exclusively to Northern Ireland)), the matter referred to under paragraph (1) above; and
(ii) at the completion of those proceedings a motion for the adjournment of the committee may be made by a Minister of the Crown, pursuant to Standing Order No. 116 (1)(h) (Northern Ireland Grand Committee (sittings)).[Mr. Betts.]

Orders of the Day — Empty Homes (Taxation)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Betts.]

Mr. Jonathan Shaw: The purpose of this debate is to make a contribution to the very welcome Government White Paper that my right hon. Friend the Deputy Prime Minister published recently, "Planning the Communities of the Future". When publishing the White Paper, he announced that the Government would increase the target for new homes built on previously developed land to 60 per cent. I and many others applaud that. However, much of the headline debate has focused on green-field and brown-field issues. It is vital that part of the debate includes how we make best use of empty properties and bring them back into use. There are 767,000 empty homes in England, the great bulk of which are in the private sector.
Existing but idle stock could make a significant contribution to the 4.4 million houses that will be required, according to current estimates. I want to discuss how we can unlock and recycle homes that are derelict and in need of refurbishment. To achieve that, we need changes in the application of value added tax to housing. There is an overwhelming case for harmonisation of VAT on new build and refurbishment of empty properties.
The Environmental Audit Committee, of which I am privileged to be a member, took evidence recently—[Interruption.]

Mr. Deputy Speaker (Mr. Michael Lord): Order. I do not know who is responsible for that pager, but Madam Speaker takes a very serious view of this matter.

The Economic Secretary to the Treasury (Mrs. Helen Liddell): I am sorry, Mr. Deputy Speaker.

Mr. Shaw: The Committee considered whether VAT should be harmonised between new build and empty homes. One of the witnesses who gave evidence was the Financial Secretary who, I regret, is not able to be here this evening. In the Committee, she reiterated the Government's commitment to sustainable development. Maximising the use of empty homes is the perfect example of sustainable development. It fulfils the three criteria: social, economic and environmental.
The pre-Budget report contains a commitment to taxing environmental bads and encouraging environmental goods. Most environmental groups are convinced that the use of empty homes would make a significant contribution to housing the nation, save the existing fabric of the buildings and reduce the toxic emissions associated with the manufacture and transportation of materials.
The current VAT system penalises those repairing or converting empty homes, as the full levy is charged, yet it encourages builders to attack green-field sites, as such development is zero-rated. When confronting the nation's massive housing problem, the previous Tory Government argued in Europe that, under article 17, the conversion of barns should be exempt from VAT, because there was a clearly defined social reason. Goodness knows how they managed to get away with that: in the same year,


1994, local councils received 120,000 families as homeless, and only one of those families was rehoused in a converted barn.
My proposal is not new. There has been VAT exemption for social housing since 1977. It was agreed by the previous Labour Government that local authorities building new properties and refurbishing empty ones should be exempt, but in those days, local authorities were the main social housing provider and since then, the provision of social housing has expanded to housing associations and private enterprise, neither of which can benefit from VAT relief.
Housing associations have done a tremendous job in tackling the regeneration and refurbishment of our towns, cities and villages but, because of the full VAT, the homes, which are in the main provided for people on low incomes, have been more expensive to rent or buy. For low-income families or those wanting to move from welfare to work, high rents can often prove a barrier or a disincentive.
Some good work has been done. Local authorities have developed many empty homes strategies. In partnership with housing associations and private owners, they have devised many excellent initiatives and brought properties back into use. I was responsible for introducing an empty properties strategy in Rochester city council, and last year, I was proud to open the 100th empty home that, with grant aid and partnership, had been brought back into use—a decent home for a young family. Without the burden of VAT, we could have helped a further 15 families.
More can be done. VAT harmonisation would focus the energy and talents of our construction industry. At present, there is nothing to encourage investment in empty property refurbishment and every incentive to continue building on green-field sites.
Among the 767,000 empty homes in England are 230,000 that have been in disrepair for a year or more. The Empty Homes Agency, which has done so much good work, calculates that there are a further 250,000 potential homes in empty residential buildings, all of which, if put into repair, would attract VAT. Those homes represent £on of assets, yet they remain idle.
What is the bottom line? As my right hon. Friend the Chancellor puts the finishing touches to the Budget, perhaps he can consider what the change would cost. Between 1994 and 1997, 90,000 such homes were brought back into use, but at a high cost to tenants, first-time buyers and Department of Social Security budgets.
My proposal would cause an annual loss in VAT collection of around £125 million. Set against that, there would be an increased collection of VAT at 5 per cent. on new build. If our targets for new housing of about 176,000 homes a year, and for renovated properties of about 70,000 a year, were met, at least £200 million would go to the Treasury. There would be no loss to the Treasury.
House builders might oppose a modest levy of 5 per cent., and their representative organisations have no doubt lobbied Treasury Ministers, but I ask my hon. Friend the Economic Secretary to consider the observations of the Royal Institution of Chartered Surveyors. It reported that such a levy would not be a barrier to new housing provision.
Let us consider the value of arable land, at £3,000 an acre. That can increase to £400,000 if residential use is granted. It may just be possible to conceive that, within that profit margin, there is room to accommodate 5 per cent. The proposal meets the EC VAT law test. I am not arguing for zero-rating. I think that we have met the revenue test, and we have certainly met the environmental test. What, then, of collection? What of the administration and the red tape? How will that work?
Harmonisation is not problematic. It would rely on the issuing of exemption certificates in respect of homes that have been empty for a long time—for a year or more. All English councils already record such details as part of their council tax activity; this would ensure that the exemption would be properly applied.
Exemption certificates would not lead to the creation of tax loopholes in regard to refurbishment. They would not mean that everyone purchasing do-it-yourself materials—which contribute some £4 billion to expenditure—would be exempt; exemption certificates would not embrace such materials.
I ask the Government to explore my proposal. I know that the Local Government Association and Government regional offices would be anxious to help to devise a system that would create a simple exemption mechanism.
In directing the energies and skills of our builders—both large and small—to securing the best value for those investing in a sustainable resource, we must bear in mind that harmonisation of VAT on new build and refurbishment of empty properties creates a win-win situation. I think all hon. Members will find it odd, as I do, that a regime that seeks to allow member states to adjust VAT for clearly defined social reasons has not been harnessed to reflect our need to house the nation. The current arrangements offer little by way of sustainability. It is currently more economic to demolish homes and build new homes on the same site than to preserve and refurbish the existing ones. We are contriving to create a constructive vandalism that leads to the needless production of raw materials and emissions.
We are getting better at recycling metals, paper and other precious materials that we used to waste. Surely we can see the sense of recycling resources of more substance—wasted homes.
The proposals to harmonise VAT for the repair of empty properties have not come only from Labour Members, but from Opposition Members—and, moreover, from the Chartered Institute of Housing, the Civic Trust, the Campaign for the Preservation of Rural England and the Empty Homes Agency. As I said earlier, the Environmental Audit Select Committee, of which I am a member, has made similar recommendations.
I appreciate that, given the hour, the fact that I am a new Member and the fact that this is my first Adjournment debate, it is unlikely that my hon. Friend the Minister will disclose the Chancellor's decisions tonight, but I ask the Government to consider the issue seriously. I have tried to set out how harmonisation of VAT on new build and empty homes meets our sustainable development objectives. I believe that my proposal passes the test in relation to EC law, and there is certainly no loss to the Revenue; indeed, I think that there will be a net gain. It is workable, through the allocation of exemption certificates.
I ask my hon. Friend the Minister to evaluate my proposal—if not now, at a later stage. I think that there is considerable consensus in favour of it, and I ask my hon. Friend not to put it in the tray marked "Too Difficult".

The Economic Secretary to the Treasury (Mrs. Helen Liddell): I thank my hon. Friend the Member for Chatham and Aylesford (Mr. Shaw) for his speech, which was all the more impressive given that he is a new Member and this was his first Adjournment debate. He must be very pleased with the amount of work that he has put in and in the ultimate product. I regret to say that my hon. Friend the Financial Secretary to the Treasury is indisposed, but she joins me in congratulating him on securing this debate. She and I agree that we should make the best possible use of our empty stock of homes. However, as I shall explain, using the value added tax system to achieve that objective is by no means as simple as it may first appear.
Before I clarify some of the important and very perceptive points made by my hon. Friend, it may be helpful if I explain the background to our zero and reduced rates. After infraction proceedings by the Commission against the United Kingdom, the European Court of Justice ruled, in 1988, that the scope of our zero rates was too wide. The court said that zero rates should apply only when there was a benefit to the final consumer, and that, in construction, they should apply only for clearly defined social reasons. The ECJ ruling resulted in changes for commercial property, but that is not the issue in this debate.
The United Kingdom took the view on domestic construction, which the Commission accepted, that to implement the United Kingdom's social policy, we were right to zero-rate the new construction of dwellings, residential accommodation and certain charity buildings.
Another important point is that construction of buildings for residential use has always been VAT-free, since the inception of VAT in 1973, whether built by local authorities, by housing associations or by private enterprise. The ECJ decision confirmed that practice. The United Kingdom was able to show that zero rating was for the benefit of the final consumer, and that it fell within the social reasons requirement of the second directive because it implemented social policy in housing matters.
Those buildings continue to be zero-rated under the arrangements provided by the sixth VAT directive. The arrangements permit member states to retain rates that were in existence in January 1991 and that fall below the minimum otherwise permitted by the directive. The directive also permits us to move away from the zero rate to a reduced rate of 5 per cent. or more. Theoretically, the United Kingdom could apply a reduced rate to the construction of all buildings that are currently zero-rated.
Hon. Members should be aware that we have agreed with our European partners that, once we have given up a zero rate, we will never reintroduce it. Similarly, we cannot introduce any new zero rates.
It may be useful to correct another misconception. The zero rating of barn conversions, which was introduced in 1994 by the previous Government, was not negotiated in Europe, as it was a relatively minor and legal change to an existing zero rate to include dwellings created for the first time from buildings used previously

For commercial or non-residential purposes. It is important to make the distinction that it applied not only to barn conversions but to conversions using redundant factories, warehouses and hospitals.
More important in the context of my hon. Friend's comments, help was also targeted specifically at housing associations. A special rule allows them to convert old non-residential buildings into housing VAT-free, without having to comply with the condition applying to all other conversions that the property is sold.
My hon. Friend suggests harmonisation of VAT rates for new construction and renovation. I should mention the limitations on that matter. Repairs and renovations to all buildings are, and always have been, taxed at the standard rate. Goods and services that are currently standard-rated are not covered by the arrangements provided by the sixth directive. The relevant law is contained in annexe H of the sixth VAT directive, which lists goods and services to which reduced rates may be applied. Category 9 on the list is the
supply, construction, renovation and alteration of housing provided as part of a social policy.
The last few words are especially important. A general reduced rate for all housing is not permitted. It is permitted only for
housing provided as part of a social policy".
We understand that phrase to mean housing provided for the less well-off, as part of a Government's social policy, such as local authority housing and housing provided by housing associations. Housing in general cannot be said to be provided as part of a Government's social policy. It is important to recognise the difference between the ECJ judgment in 1988, which accepted that zero rating of housing was for social reasons because it implemented social policy, and the requirement that annexe H is restricted to what we call social housing.
I should add that there have been several views over the years about the meaning of the words in category 9 of the annexe. We did think that, in theory, we could have a general reduced rate. In the context of introducing a reduced rate for the installation of energy-saving materials, we sought the view of the Commission. Its view is that a reduced rate provided under this category could be applied only narrowly, and should be specifically targeted to benefit the less well-off. After taking legal advice, we are now clear that it applies to social housing only.
My hon. Friend the Member for Chatham and Aylesford forcefully argued that there was a strong case for a reduced rate for renovation because it would encourage the regeneration of Britain's many empty homes. However, many empty homes are in private ownership and therefore would not qualify for a reduced rate. Any change in law would have to be negotiated in Europe. It would take a long time, and the chances of success would be low.
The House will realise from what I have said that a reduced rate is not the universal panacea that some people claim it to be. Furthermore, the European Commission recently examined the operation of the reduced rates and reported that reduced rates were a very imprecise tool for policy making, and should not be used as a substitute for direct subsidies.
That is very much in line with the Government's thinking on the application of reduced rates. In general, we believe that widespread use of reduced VAT rates is likely to result in unnecessary complication of the tax, to the detriment of business and the integrity of the tax. We do, however, believe that in some circumstances a reduced rate, such as the reduced rate for domestic fuel and power, may be a useful tool to tackle specific problems. The reduced rate for certain installations of energy-saving materials is another case in point.
My hon. Friend asks: what will it cost? Obviously there is a revenue issue. A recent estimate of the cost of reducing VAT to 5 per cent. for all house renovations was £1.1 billion. Even combined with a reduced rate on new construction, there would still be a very substantial loss to the Exchequer, which would have to be made up by increased taxation elsewhere.
It would be very easy to rush headlong into introducing measures that sound like good ideas. Let us be clear in our mind about the consequences of introducing a harmonised reduced VAT rate for housing. VAT might then become chargeable on new social housing. Only renovations permitted under annexe H would enjoy a reduced rate from the current full VAT rate of 17.5 per cent. It is important to reiterate that work on all other existing housing will continue to be rated at 17.5 per cent. That

will create new borderline difficulties between different types of housing, which will become subject to different VAT rates.
I fully understand, and am sympathetic to, the views of my hon. Friend, but I am not yet convinced that using the VAT system to address the issue of regeneration of empty properties is the right course of action. Furthermore, there is little hard evidence at the moment to support claims that a reduced rate would generate more jobs, lower consumer prices or counteract environmental effects to any real extent. VAT, even at a reduced rate, on new housing would be very unpopular with house buyers.
We should explore other options for achieving the objective of reducing the cost of renovating properties. The possible results of hasty changes are too uncertain. We do not want to risk leaving a legacy of VAT on new houses without fully considering all the options and all the likely pitfalls.
I assure hon. Members that the Government will continue to explore all possible means of addressing the issue. It will not be filed away where my hon. Friend suggested, although I am sure that he agrees that it is a difficult issue. I thank him for giving us an opportunity to explore the issues and congratulate him again on securing this important Adjournment debate.

Question put and agreed to.

Adjourned accordingly at nineteen minutes past Three o'clock.